Preamble

The House met at Half-past Two o'Clock

PRAYERS

[Mr. SPEAKER in the Chair]

Oral Answers to Questions — NEW TOWNS

Mr. Sparks: asked the Minister of Town and Country Planning what new towns have so far been designated; what population each will contain; from which built up areas population will be attracted; and what stage of development has been reached in each case.

The Parliamentary Secretary to the Ministry of Town and Country Planning (Mr. King): As the reply is somewhat long, and includes a list of figures, I will, with permission, circulate it in the OFFICIAL REPORT.

Mr. Sparks: Is my hon. Friend aware, in view of the fact that the local authorities in Greater London, including the London County Council, are not now able to develop housing schemes outside their boundaries, how urgent and important it is that new towns in the Greater London area should be expedited as quickly as possible; and would he give an assurance that this has been borne in mind?

Mr. King: We are certainly hurrying these matters as much as possible. The circumstances mentioned by my hon. Friend largely account for the conception of the new towns.

Mr. Skeffington-Lodge: In connection with any sites for new towns in the future, will my hon. Friend try to arrange for a little more imagination to be shown in the selection of those sites, and also see that due regard is paid to the fact that agricultural land should be avoided as far as possible in any choice which is made?

Mr. King: In co-operation with my right hon. Friend the Minister of Agriculture, we always have regard to agricultural interests, and endeavour to secure agreement on this matter.

Following is the reply:

Following is a list of the new towns which have so far been designated, together with their proposed population:

(1) Aycliffe (10,000).
(2) Basildon (50,000).
(3) Crawley (50,000).
(4) Harlow (60,000).
(5) Hatfield (25,000).
(6) Hemel Hempstead (60,000).
(7) Peterlee (30,000).
(8) Stevenage (60,000).
(9) Welwyn Garden City (36,500).

The seven new towns in the south are designed to attract population from the congested areas of Greater London. Detailed arrangements for associating particular new towns with particular congested areas are at present under consideration. Aycliffe will mainly provide for people working in the neighbouring trading estate, and Peterlee for the mine workers in the neighbourhood together with such other workpeople as will be desirable to produce a balanced community.

As regards the last part of the Question, it will be appreciated that the early work of creating a new town is essentially that of surveying the ground, preparing plans and initiating basic services. Actual building has, however, been begun by most of the older established Corporations.

Oral Answers to Questions — NATIONAL INSURANCE

Lost Contribution Card

Sir John Mellor: asked the Minister of National Insurance why Mr. George Hardy, of 33, Holland Street, Sutton Coldfield, Number BA970523, was informed by letter dated 6th January, 1949, that his 1947–48 contribution card showed no contributions paid and 10 credits only, when in fact it was fully stamped up to 3rd May, 1948, and had, between August, 1948, and the end of that year, been lost by the Department at Newcastle; and why Mr. Hardy was not informed in January that his card was missing.

The Parliamentary Secretary to the Ministry of National Insurance (Mr. Steele): I reget that a mistake was made in this case. Mr. Hardy's contribution record has since been investigated and as a result he will be treated as having a full record for the year 1947–48.

Sir J. Mellor: Is the Parliamentary Secretary aware that the point is that not only was a false statement made, but a statement was made which the Ministry could not possibly have believed to be true? Will he therefore please explain how this arose?

Mr. Steele: The clerk in the local office who was dealing with this matter unfortunately gave the wrong impression to Mr. Hardy; but Mr. Hardy was visited by one of our inspectors in January and in February and there was no misapprehension or misunderstanding in his mind as to the actual cause of the delay.

Sir J. Mellor: But the Ministry said that Mr. Hardy's card showed no contributions paid. How could they say that when they had lost the card?

Mr. Steele: I think it must be appreciated that the local offices were working under great strain at this time, and the clerk, unfortunately, worded the message to Mr. Hardy in this way. Mr. Hardy was visited by one of our inspectors in January and in February and he appreciated why the delay occurred.

Supplementary Allowances (Aged Persons)

Mrs. Braddock: asked the Minister of National Insurance if he will alter the regulations for supplementary allowances under National Assistance, to ensure that aged persons living alone shall be assured an income of not less than £2 per week, and married aged couples living together, not less than £3 15s. per week.

Mr. Steele: Any alteration in the present regulations, which were approved by this House as recently as 16th June last and came into force on 7th July, is a matter in the first instance for the National Assistance Board. The Board inform me that they have recently reviewed the position in the light of representations made to them by deputations

including representatives of old age pensions associations, but do not consider that there are grounds at present on which they would be justified in recommending increased rates.

Mrs. Braddock: Would the Parliamentary Secretary, at any rate, ask the advisory committee to review this question, because if aged people are taken into the hostels that have to be set up by the local authorities the cost per person in the hostels is approximately £3 per week, and it is silly to imagine that a person for whose maintenance in a hostel £3 is required can manage outside on less than £2 per week?

Mr. Steele: I understand that this was one of the matters which was discussed when the deputation met the chairman of the Assistance Board.

Mrs. Jean Mann: Can the Minister say how much of the hostel cost is accounted for by the provision of staff?

Mr. Steele: I am afraid that is another question.

Oral Answers to Questions — EMPLOYMENT

Canteen Advisers

Air-Commodore Harvey: asked the Minister of Labour how many persons are employed by his Department as factory canteen advisers throughout the country; what amount is spent in this connection; and what average percentage of the recommendations put forward by these advisers are adopted by factory managements.

The Minister of Labour (Mr. Isaacs): There are 18 canteen advisers and the present cost of their salaries is about £11,000 a year. As to the third part of the Question, statistics are not available. The advisers visit factories for the purpose of giving advice on all sorts of matters of detail connected with the running of canteens, and it would be quite impossible to say what percentage of their suggestions is in fact adopted, though employers do, in general, welcome their advice and most of the advisers' visits are made in response to direct requests for help by managements.

Air-Commodore Harvey: Is the Minister aware that one of these advisers


visited a firm in Macclesfield which is exporting 90 per cent. of its output and that, among many recommendations, one was that the porcelain sink should be replaced by a galvanised one; and would the right hon. Gentleman please instruct the advisers that, while they carry out a useful job, they should try to be a little more serious about their recommendations?

Mr. Isaacs: I would not care to express an opinion on that until I knew all the facts of the case, but now that the hon. and gallant Gentleman has raised the matter I will have it looked into.

Mr. Sidney Shephard: Has an adviser the right to walk into any canteen without permission; and is a firm liable to prosecution if it does not carry out the recommendations of the adviser?

Mr. Isaacs: I should certainly like to have notice of those two questions.

Shoe Factory Foremen (Advertisement)

Mr. Manningham-Buller: asked the Minister of Labour why the approval of the employment exchange at Northampton has to be obtained before an advertisement offering employment to foremen in a shoe factory in South Africa can be inserted in a Norwich newspaper; and under what regulation this is required.

Mr. Isaacs: I have been unable to trace this case, but I shall be glad to make inquiries if the hon. and learned Member will send me details.

Mr. Manningham-Buller: As I understand that the branch of the Ministry of Labour at Norwich gave this information which, of course, recognises the importance of Northampton, I will give the right hon. Gentleman particulars and perhaps he will say later whether there is any regulation which makes this necessary?

Mr. Isaacs: If the hon. and learned Member will send me particulars, I will let him have the fullest information possible.

Displaced Persons, Conway

Mr. Goronwy Roberts: asked the Minister of Labour why his Department refused permission for 12 displaced persons to be loaned to Conway Borough

Council from a neighbouring camp to assist temporarily in developing the borough's water supply scheme.

Mr. Isaacs: Because suitable unemployed British workers were available locally. All the contractor's demands have been met promptly by the submission of suitable British candidates. At the time the borough surveyor was trying to arrange for the contractor to be supplied with 12 E.V.W.s, the contractor had no outstanding demands with the local office. He then asked for six British and these were sent the following day. All demands put in later have also been met.

Employees (Political Tests)

Mr. H. D. Hughes: asked the Minister of Labour whether, before making the facilities afforded by his Department available to commercial firms, he will come to a general agreement with them that no political tests shall be imposed on employees supplied by him.

Mr. Isaacs: No, Sir. In submitting workers for employment my Department does not discriminate on grounds of race, colour, sex or belief.

Mr. Hughes: Has the attention of the Minister been drawn to the recent proposals by the John Lewis partnership to make members of their staff sign a political declaration on pain of dismissal if they refuse to do so, and does he consider that the security problems involved in the sale of ladies' underwear are sufficiently important to warrant this intolerable intrusion into the private lives of their employees?

Mr. Isaacs: I can only say that as far as my Department is concerned, we do not discriminate in these political activities. I hope that firms also will follow the same example.

Mr. Eric Fletcher: Would not the-Minister agree that although a great many Communists are notorious trouble makers it is very undesirable that there should be any discrimination by commercial firms against the employment of all Communists as such?

Mr. Isaacs: In reply to that question. I think that it is fair to state that there are many known and active Communists who in the workshops are first-class and reliable workers.

Mr. Sydney Silverman: Can the Minister say whether any man dismissed under this arrangment would be entitled to unemployment benefit and, if so, whether there is any method of preventing this firm from applying their own political opinions to their staff at the public expense?

Mr. Isaacs: So far as unemployment benefit is concerned, without expressing myself too definitely, I should have thought that this would not deprive a man of his right to benefit, but as to whether we have any influence with the firm, all I can say is that I hope that they will not continue this practice.

Mr. Speaker: Mr. Skeffington-Lodge.

Mr. Skeffington-Lodge: Will the Minister consider black-listing—

Mr. Speaker: We cannot go on with this Question indefinitely. I once said, "Is your supplementary really necessary?" We must get on with Questions. I called the hon. Member to ask Question No. 9.

Mr. Hughes: While welcoming the Minister's assurance, in view of the tremendous political importance of the principle involved. I beg to give notice that I shall seek an early opportunity to raise the whole matter on the Adjournment.

Mr. Skeffington-Lodge: Unfortunately, that rules me out.

Germans

Mr. Skeffington-Lodge: asked the Minister of Labour what are the safeguards subject to which he decides whether or not to allow employers to employ Germans.

The Parliamentary Secretary to the Ministry of Labour (Mr. Ness Edwards): The safeguards are the same as those applied in the case of other foreign nationals. Permits are granted only if the employment is of a useful and necessary character, if no workers resident in this country are available and if the wages and other conditions of employment proposed are not less favourable than those commonly accorded to British workers.

Oral Answers to Questions — SCOTLAND

Housing

Colonel J. R. H. Hutchison: asked the Secretary of State for Scotland whether in view of the effect on house property of the Scottish rating system and Rent Restriction Acts combined, he is prepared to review, with a view to alteration, one or both of these Acts.

The Secretary of State for Scotland (Mr. Woodburn): The effect of the Scottish rating system on the provision of houses was examined in 1944 by a Committee presided over by Lord Sorn and the position under the Rent Restriction Acts was considered by the Ridley Committee in 1945. I regret that in present circumstances I cannot hold out any prospect of legislation.

Colonel Hutchison: In view of the right hon. Gentleman's remarks in the Scottish Housing Debate on 13th April, what steps does he propose to take to end the deadlock in the possibility of getting housing, particularly in Glasgow, repaired?

Mr. Woodburn: That, of course, is another question which is not necessarily connected with the point raised by the hon. and gallant Gentleman in his first Question.

Mr. Gallacher: Would the Minister not consider getting the De-rating Act withdrawn in view of the fact that if it were withdrawn, many local authorities would receive rates which would more than cover any deficit they have in their housing accounts?

Colonel Hutchison: Might I have an answer to the question I put? Are there any steps to be taken by the right hon. Gentleman?

Mr. Woodburn: I said in the original answer that I could not hold out any hope at present of legislation on this matter.

Commander Galbraith: Can the Minister say what he means by the words, "present circumstances"—is he referring to the nearness of the General Election or what?

Mr. Woodburn: I should say that in view of the fact that the Conservative


and all previous Governments were unable to find any solution for their own friends' problems, it is not very easy for us to find one in such a short time.

Poultry Ration

Mr. Niall Macpherson: asked the Secretary of State for Scotland whether he will permit farmers who occupy more than one farm to draw a poultry ration in respect of each of the farms that they occupy, although the poultry is, for the purposes of economical management located at one of the farms only.

Mr. Woodburn: Where adjoining holdings are worked as one, my Department are prepared to consider the combined acreages for the purpose of assessing rations.

Mr. Macpherson: Would not the Secretary of State extend this to cases where the holdings are not adjoining?

Mr. Woodburn: I think the hon. Gentleman should not grumble at a satisfactory answer.

Oral Answers to Questions — MINISTRY OF PENSIONS

Tuberculosis Patients (Allowances)

Mr. De la Bère: asked the Minister of Pensions (1) how many ex-Service men and women disabled by tuberculosis were receiving pensions on 31st December, 1948; how many so disabled were drawing constant attendance allowance; and whether, in practice, such cases are excluded from constant attendance allowance unless they are regarded as incurable;
(2) how many ex-Service men and women receiving pensions in respect of disablement by tuberculosis were, on 31st December, 1948, also receiving unemployability allowance; and whether, in practice, such cases are excluded from unemployability allowance unless they are regarded as incurable.

The Parliamentary Secretary to the Ministry of Pensions (Mr. Simmons): The estimated number of ex-Service men and women pensioned for tuberculosis is 53,000 but not all are totally disabled. Eligibility for the grant of constant attendance allowance or the unemployability supplement does not depend upon the disease being incurable. The constant

attendance allowance is given when personal help at home is necessary, and the unemployability supplement is granted when the pensioner is not likely to be able to resume work within a reasonable period. The numbers of constant attendance allowances and unemployability supplements in payment to pensioners suffering from tuberculosis are approximately 800 and 3,500 respectively. In many of these cases happily the prognosis is favourable.

Mr. De la Bère: Can the Minister state whether he has any cases where constant attendance allowance has been refused and where it has been applied for again, and whether there are cases of hardship which are not being sympathetically considered?

Mr. Simmons: Constant attendance allowance is only payable when personal attendance in the home is necessary for the pensioner. These cases are all dealt with on a very sympathetic basis and where a claim is proved to he necessary, a grant is made. It would be unfortunate to give the impression that this grant implied that the disease is incurable, because that is not so. Many of the people who are getting the constant attendance allowance and the unemployability supplement are curable.

Mr. Leslie Hale: Can the Minister say whether any statistics are preserved of the numbers of those who have applied for a pension on this ground but have failed to establish attributability?

Mr. Simmons: The number of ex-Service pensions for tuberculosis in the 1914–18 war is 18,000, and for the 1939–45 war, the number is 35,000.

Mr. Chetwynd: Is it not a fact that quite recently the Government have widened the application of the pensions to people who were previously turned down?

Mr. Simmons: The number of people receiving 100 per cent. pension for tuberculosis from the 1914–18 war is 4,000 and for the 1939–45 war 19,000.

Claim, Stafford

Mr. Swingler: asked the Minister of Pensions why there has been a delay of four months in considering the claim to a higher pension of Mr. F. H. Dix, 18 Reva Road, Stafford, about whom the hon.


Member for Stafford wrote to his Department on 7th April; and when a decision may be expected.

Mr. Simmons: As I have explained in the letter I am sending to the hon. Member, some unavoidable delay occurred in obtaining the necessary medical evidence. But I am glad to say that Mr. Dix's claim has now been accepted, and his pension will be increased from the 20 per cent. to the 50 per cent. rate. The increase will date back to the date of his claim in December last.

Mr. Swingler: While thanking the Minister for that reply and for the action he has taken, may I ask if he is aware that the medical examination in connection with this claim took place in January, and that Mr. Dix went to Birmingham twice in January for medical examination, and that, therefore, the delay which has taken place since January hardly seems to be justifiable?

Mr. Simmons: These cases are given the most careful consideration. As there is a favourable outcome of this case, I think the delay was justifiable. The hon. Gentleman will have an explanation in the letter which I am sending him, but which I do not think it is fair to give to the House, for certain reasons.

Oral Answers to Questions — TERRITORIAL ARMY

Motor Cars (Allowance)

Sir John Mellor: asked the Secretary of State for War if he will now make a statement with regard to the licensing and insurance of motor cars owned by members of the Territorial Army and used in connection with their duties.

The Secretary of State for War (Mr. Shinwell): It has been decided that the difference between full rates and half rates will be refunded to members of the Territorial Army who have to pay full licence and insurance when they draw supplementary coupons solely for journeys in connection with their Territorial Army duties. The scheme will be promulgated as soon as administrative details have been settled.

Sir J. Mellor: Did the right hon. Gentleman say that the extra cost of insurance would also be refunded?

Mr. Shinwell: I think the hon. Gentleman had better see the details.

Camp Training (Clothing)

Colonel Hutchison: asked the Secretary of State for War whether he will issue, at any rate for the period of annual camp training, an additional set of battle dress and additional pair of boots to Territorials attending camp.

Mr. Shinwell: I regret that it is not possible to increase the scale of clothing for the Territorial soldier as suggested.

Colonel Hutchison: Does the Minister realise that, when it is wet in camp, as it very frequently is, the only alternative to a wet pair of boots and a wet battledress is to wear denims? Would it not help to popularise the Territorial Army, and would not need a further issue, as the articles could be held in the quartermaster's store merely for the period of the camp?

Mr. Shinwell: I can hardly imagine that members of the Territorial Army would be troubled by a little wet.

Week-end Training (Allowance)

Major Legge-Bourke: asked the Secretary of State for War why a married soldier who previously would have received £1 7s. for attending week-end Territorial Army training now only receives 8s.; and if he will take immediate steps to ensure that every encouragement possible is given to week-end training in the Territorial Army.

Mr. Shinwell: Under the new arrangements, men are eligible for pay and free rations for training periods in excess of eight hours. Under the previous arrangements, by being in camp on Friday night for the week-end, it was possible to qualify for pay and full allowances, whereas the man who could not get there till Saturday, although he did the same amount of training, could only qualify for a maximum of 9s. 0d. training expenses allowance, out of which he had to pay for his rations. The revision was made to obviate anomalies of this sort, and the great majority of men benefit substantially from the change.

Major Legge-Bourke: Does not the right hon. Gentleman realise that a marriage allowance is not now permissible, that many of these men have to go very long distances to do their training, and are put to considerable inconvenience and expense?

Mr. Shinwell: That is quite a different question.

Oral Answers to Questions — BRITISH ARMY

Stores (Losses and Thefts)

Sir Waldron Smithers: asked the Secretary of State for War in view of the Report of the Comptroller and Auditor-General on page vii of the Appropriation Account, 1947–48, paragraphs 25 and 26, in which he refers to losses and theft due to fraud and gross negligence, what steps he is taking to discover and take disciplinary action against the offenders.

Mr. Shinwell: The losses occurred mainly at overseas stations, many of them during or immediately following the war. Large quantities of stores and supplies were necessarily stored in the open or in inadequate accommodation, and sufficient reliable guards were rarely available. Whenever Army personnel were involved in the losses, Courts of Inquiry were held, and disciplinary action has been taken where appropriate. The hon. Member will, however, appreciate that the thefts were usually by local civilians.

Chelsea Pensioner (Maintenance)

Lieut.-Commander Clark Hutchison: asked the Secretary of State for War why the pension payable from the Royal Hospital, Chelsea, to a pensioner who is an inmate of a mental hospital is used for the maintenance of the pensioner in that institution, instead of being paid direct to his wife, as is the normal practice in the case of pensions paid by the Ministry of Pensions.

Mr. Shinwell: A Chelsea pension is not used for the maintenance of a pensioner of unsound mind. It may, in suitable cases, be diverted for the maintenance of dependent relatives. If the hon. and gallant Member has a particular case in mind, I shall be glad to investigate it.

Ex-Officer's Claim

Brigadier Peto: asked the Secretary of State for War whether he has considered the case of 224048 ex-Captain John Routcliffe Squire, M.B.E., Royal Engineers, which was forwarded to him on 21st April; whether, in this case, he is prepared to recommend any financial compensation for wrongful imprisonment; and if he will make a statement.

Mr. Shinwell: I understand that this ex-officer is taking proceedings forthwith in this matter. It must, therefore, be regarded as sub judice.

Brigadier Peto: Cannot the right hon. Gentleman tell the House and the public, who are taking such an interest in this case, whether some compensation is not allowable in a case of this sort, where a man has tried to clear his name and has spent much of his private income, apart from receiving insults about which I have told the Secretary of State? Cannot he tell the House whether some compensation is allowable?

Mr. Shinwell: This ex-officer is taking proceedings, and it would be quite improper for me to express an opinion at this stage.

Mr. Speaker: I understand that proceedings are taking place in this case, and therefore we cannot discuss it. I should not have allowed the last question.

Detained Soldier (Discharge)

Mr. Platts-Mills: asked the Secretary of State for War, in view of the fact that the hon. Member for Finsbury was informed by his Department on 29th March that discharge action had been taken in the case of 5433205 Private E. Tibbitts, why that soldier was not forthwith discharged; why he has still not been discharged; on whose authority has his discharge been cancelled; whether he is aware of the suffering this delay and these contradictory orders have caused both to the soldier and his wife and children; and what instructions he now proposes to issue.

Mr. Shinwell: This soldier's discharge from the Army was authorised towards the end of March. Before discharge could be carried out, it was necessary to review the sentence of detention the soldier was serving with a view to


remitting the balance of the sentence. As soon as the competent authority authorised remission, discharge was carried out, and the soldier was released on 28th April.
I regret that there was some delay in reviewing the sentence. The desirability of giving immediate consideration to the remission of balance of sentence in such cases has been brought to the notice of the reviewing authority.
In consequence of the discharge having been carried out originally on 12th April, 1949, Mrs. Tibbitts' allowance order book was recalled by the Paymaster on 21st April. As soon as this was realised, the notification of discharge was cancelled, not with the object of holding up the discharge, but purely to permit the issue of the allowance up to the date on which the soldier was actually released from the detention barrack.

Mr. Platts-Mills: Will the Minister recognise that in this case, where no proceedings are contemplated, because this is only a working man ex-soldier, the month's delay between the inception of proceedings for discharge—which was understood by all of us to be discharge from his detention—has caused great anxiety to his wife, and would he not consider making an award of compensation in this case?

Mr. Shinwell: In the first place, I should like to say that I resent the inference that we treat the private soldier differently from the officer. It is quite untrue. As regards the delay, I am sorry that it took place, but I cannot see that any question of compensation arises.

Mr. Platts-Mills: On a point of Order. May I not make some response to the suggestion that there was an inference in my question? You will remember, Mr. Speaker, that in a previous question of a similar character, attention was drawn to the fact that there were proceedings taking place. No one in the world would ever dream of a Finsbury soldier having a private income to use in taking proceedings against the Minister. It is that to which I wish to draw attention.

Mr. Speaker: The hon. Member has done it.

Medical History Sheets

Lieut.-Colonel Lipton: asked the Secretary of State for War why, in a case of which he has particulars, the legal advisers of an ex-soldier were denied a copy of his medical history sheet.

Mr. Shinwell: A soldier's medical history sheet is maintained for strictly Service purposes, and copies are not furnished to individuals or their legal advisers. The disclosure of medical history sheets would be detrimental to the public interest, as tending to deter Service personnel from seeking medical treatment, and to impair the frankness of Service medical officers in reporting on them. It is the invariable practice to plead privilege for Service medical documents, a fact which is, I think, widely known.

Lieut.-Colonel Lipton: Is the Minister aware that this particular ex-soldier was, in the course of matrimonial proceedings, seeking to disprove a serious allegation that he had contracted venereal disease while in the Army? In those circumstances, why would not the War Office help in a matter affecting the private, personal and moral character of an individual, where it could not possibly affect any question of privilege or security?

Mr. Shinwell: This case has now been settled, and I think we had better leave it alone.

Recruiting Campaign

Mr. Emrys Hughes: asked the Secretary of State for war how many officers and men are now employed on the recruiting campaign; what was the total cost of recruiting in the three months ended 31st. March; and how these figures compare with those for the previous quarter.

Mr. Shinwell: No serving officers or male other ranks are employed specifically on recruiting duties; the only serving personnel so employed are 53 noncommissioned officers of the W.R.A.C. in Army recruiting offices, the staffs of which otherwise consist of retired officers, ex-soldiers and other civilians. The staffs of Territorial and Auxiliary Forces Associations and officers and men of the Territorial Army are of course also helping in the campaign. Records are not kept in a form from


which figures of quarterly expenditure on recruiting could be produced without a disproportionate amount of work.

Mr. Hughes: Is the Minister aware that the Minister of Defence has already given certain figures, and cannot he tell us what was the cost of this recruiting campaign?

Mr. Shinwell: If my right hon. Friend has already furnished figures to my hon. Friend, he ought to be satisfied.

Mr. Gallacher: Has the Minister made any attempt to get into touch with the leaders of the Communist Party in order to get advice on how to conduct a campaign?

Oral Answers to Questions — HORTICULTURE (MINISTERIAL RESPONSIBILITY)

Mr. Wadsworth: asked the Prime Minister if he will make arrangements to enable the pre-war practice to be resumed whereby the Minister of Agriculture assumed responsibility for the production and distribution of all horticultural products and the correlation of imports of horticultural produce with homegrown foodstuffs by arrangement with the Board of Trade.

The Lord President of the Council (Mr. Herbert Morrison): I have been asked to reply. My right hon. Friend the Prime Minister thinks that the hon. Member is under some misapprehension about the extent of the pre-war responsibilities of the Minister of Agriculture, and, in any event, he sees no reason to alter the present arrangements.

Mr. Wadsworth: Would not the right hon. Gentleman agree that most of the difficulties that have been created are felt by the horticultural producers to be due to the split responsibility of the Minister of Agriculture and the Minister of Food; and would it not be desirable that the Prime Minister should impose a responsibility for horticulture on one Minister, and particularly one who has the full confidence of the horticultural industry?

Mr. Morrison: I do not think that my right hon. Friend would agree with the implication in the hon. Member's question.

Oral Answers to Questions — HONG KONG (DEFENCE)

Mr. Gammans: asked the Prime Minister if he will make a statement regarding the steps which are being taken to safeguard Hong Kong against external aggression and possible fifth column sabotage.

Mr. H. Morrison: I have been asked to reply. I would ask the hon. Member to await the statement which will be made in the Debate on the China situation next Thursday.

Mr. Gammans: Can the right hon. Gentleman say whether that statement will include what steps the Government propose to take in order to safeguard Hong Kong against the danger which is imminently threatening it?

Mr. Morrison: I have no doubt that in the preparation of the statement, account will be taken of the question put by the hon. Member.

Oral Answers to Questions — NATIONAL FINANCE

High Court Judges (Salaries)

Mr. Marlowe: asked the Chancellor of the Exchequer whether he will now introduce legislation to increase the salaries of His Majesty's High Court judges, in view of the increased cost of living since these were last fixed in 1831.

The Financial Secretary to the Treasury (Mr. Glenvil Hall): My right hon. and learned Friend has this matter under consideration in consultation with the Lord Chancellor.

Mr. Marlowe: As this matter has now been so long delayed, can the right hon. Gentleman indicate when some steps are going to be taken about it?

Mr. Glenvil Hall: Yes, Sir. Legislation will be necessary, and I think I can promise the House that that legislation will not be long delayed; it will certainly be this year.

Colonel Gomme-Duncan: Will the right hon. Gentleman also consult with the Scottish authorities in connection with the High Court judges of Scotland?

Mr. Glenvil Hall: I understand that is being done.

Mr. E. Fletcher: Do not the Government agree that public interest suffers unless His Majesty's judges are remunerated on a scale commensurate with the salaries paid to high executives in industry, and that there is an unanswerable case for reconsideration?

Mr. Glenvil Hall: Obviously, all those points will be taken into consideration when a decision is arrived at in this matter.

Mr. Scollan: Can my right hon. Friend say whether the Government have taken the trouble to draw the attention of the High Court judges to the White Paper on Personal Incomes Costs and Prices?

Lieut.-Commander Gurney Braithwaite: Can the right hon. Gentleman inform the House what was the purchasing power of the pound in 1831 as compared with 1949?

Mr. Glenvil Hall: If the hon. and gallant Member will put down that question, I will answer it.

Mr. Hale: Will my right hon. Friend bear in mind the constitutional implications, because in 1931 His Majesty's judges made representation, when it was proposed to reduce their salaries, to the effect that we had not that power, and that it was a grave breach of the Constitution to interfere with their terms of employment?

E.R.P. Aid

Sir W. Smithers: asked the Chancellor of the Exchequer if he will now state the amount of Marshall Aid to be received by the United Kingdom in the period beginning July, 1949, and, of this, how much is gift and how much loan.

The Economic Secretary to the Treasury (Mr. Douglas Jay): No, Sir. The amount of E.R.P. aid that may be made available to the United Kingdom in the period beginning July, 1949, is not yet known; nor is it known what, if any, proportion of such assistance would be in the form of a loan rather than grant.

Sir W. Smithers: Is not the Economic Secretary aware that the necessity for the continuance of Marshall Aid is mainly due to the presence of a Socialist Government in Great Britain?

Pound Sterling (Purchasing Power)

Sir W. Smithers: asked the Chancellor of the Exchequer if, taking the purchasing power of the £1 in 1914 as 100, he will give the corresponding figure for the latest available date.

Mr. Jay: In March, 1949, the purchasing power of the pound reckoned over the whole field of consumers' expenditure, was about 35 per cent. of its purchasing power in 1914.

Sir W. Smithers: Is the hon. Gentleman aware that if this Government remain in power, the purchasing power of the pound will go to nothing? What is the good of 100 paper pounds a week if the money is worthless?

Mr. Jay: The hon. Gentleman forgets that a large part of the fall occurred between 1914 and 1920.

British Salesmen, U.S. A. (Currency Allowance)

Mr. Walter Fletcher: asked the Chancellor of the Exchequer whether, in view of the Government's desire for British salesmanship in the United States of America to extend beyond the Atlantic seaboard, he will undertake to provide the extra dollars required for British salesmen to make their efforts more widespread throughout that country.

Mr. Jay: As my right hon. Friend the President of the Board of Trade made clear in his speech in the House on 11th April, the Government are most willing to provide dollars for any legitimate purposes connected with the export trade to the United States. So far as business travel is concerned, the Bank of England is prepared to provide currency up to a maximum of £10 per day to all businessmen who wish to visit the United States for the purpose of promoting our exports. Moreover, where an exceptional amount of travelling is involved and the tickets cannot be paid for in sterling before departure, the Bank will be prepared to make an extra allocation of currency to meet travelling expenses. I am not aware that the efforts of businessmen are hampered in any way through lack of dollars for business visits, but, if there is any evidence to the contrary, I will gladly look into the matter.

Tobacco Tokens (Retailers' Refunds)

Mr. Odey: asked the Chancellor of the Exchequer whether, in view of the long delay that retail tobacconists are experiencing in obtaining a refund on tobacco supplies to old age pensioners, he will review the present arrangements which are having an adverse effect upon the benefits derived from this concession by old age pensioners.

Mr. Glenvil Hall: I am not aware of any delay, but, if the hon. Member has any particular case in mind, I will look into it.

Education (Aliens and Non-Residents)

Mr. Thomas Reid: asked the Chancellor of the Exchequer what is the annual cost to the British taxpayer of providing scholarships and other educational facilities to individual aliens and to individual British subjects who are not residents of Great Britain.

Mr. Glenvil Hall: I am circulating in the OFFICIAL REPORT a statement giving the cost of certain arrangements for the provision of scholarships and educational facilities for the persons mentioned.

Mr. Reid: Will my hon. Friend say whether, in view of the heavy taxation in this country, expenditure on things like these are essential?

Mr. Glenvil Hall: I would ask my hon. Friend to remember that in 1947 we passed an Act through this House—I think by general consent—the Polish Resettlement Act, in which certain provisions were made which, of course, the Government have had to implement.

Mr. Lipson: In view of the fact that this money is very well spent, will the right hon. Gentleman give an assurance that it is the intention of the Government to continue this policy?

Following is the statement:

Apart from the cost of the special services mentioned below, the cost to public funds of providing educational facilities for the persons mentioned is not known but is thought to be very small. The Polish Resettlement Act, 1947, gave the Minister of Education and the Secretary of State for Scotland specific powers under which they can provide Poles who elect

not to return to Poland with the education necessary to fit them for resettlement here or overseas. The total cost of all services so provided, including the cost of schools for Polish children, is estimated at £1,936,400 in 1949–50. The net expenditure of the British Council in the financial year 1948–49 in providing scholarships and other educational facilities for the persons mentioned was £201,800. Expenditure by the Colonial Office in 1948–49 for the same purpose was approximately £275,300.

Displaced Persons (Income Tax)

General Sir George Jeffreys: asked the Chancellor of the Exchequer whether his regulations provide that displaced persons, who are employed in this country, shall be liable to pay Income Tax on their earnings.

Mr. Glenvil Hall: Yes, Sir.

Gold Price

Colonel Crosthwaite-Eyre: asked the Chancellor of the Exchequer what discussions have taken place between His Majesty's Government, other members of the sterling area and the International Monetary Fund on the adjustment of the gold price, both for monetary and non-monetary purposes.

Mr. Jay: No discussions have taken place on this subject between His Majesty's Government and the International Monetary Fund. The other members of the sterling area who are members of the I.M.F. are members in their own right, and any discussions between them and the Fund are the concern of those Governments. We are, of course, in close touch on all these matters, as part of the normal exchange of information between the Commonwealth countries.

Colonel Crosthwaite-Eyre: Does that answer mean that His Majesty's Government will support any move by members of the sterling area to secure a more equitable price, particularly for non-monetary gold?

Mr. Jay: No, Sir, it does not necessarily mean that. That is another question which the hon. and gallant Member might put down.

Colonel Crosthwaite-Eyre: As this Question asks most particularly whether


any action has been taken on this matter, cannot the hon. Gentleman at least give an indication of the view of His Majesty's Government?

Mr. Jay: I cannot give an indication of what our view might be on a subject which has not arisen, but, as I say, these matters are normally discussed between members of the Commonwealth in the ordinary course of business.

Raw Materials (Prices)

Colonel Crosthwaite-Eyre: asked the Chancellor of the Exchequer, in view of the urgency to secure more dollar earnings, when he expects that British manufacturers will be able to secure raw materials at prices not higher than those paid by their competitors in the United States of America.

Mr. Jay: The hon. and gallant Gentleman will be aware of the difficulty of making a comparison in such general terms. I assume that the Question is related primarily to raw materials purchased centrally by the Government. The object here has been, except, where it is the Government's policy to subsidise, to make over a period neither profit nor loss. Thus, while prices were rising, certain raw materials were from time to time on sale at prices below the general world level. Now that some prices are falling, the converse may be true. Where export markets are involved, however, it may be necessary to adjust selling prices without too close regard to original cost. The Government are alive to this, and certain price adjustments have already been made.

Colonel Crosthwaite-Eyre: Can the hon. Gentleman state, particularly in regard to linseed and base metals, what action His Majesty's Government are taking, or propose to take, to ensure that British manufacturers can secure those materials at the same price as their American competitors?

Mr. Jay: As I say, our policy is, on the one hand, to even out profits and losses over a period, but, on the other hand, where exports are concerned, to see that our manufacturers are not placed at a disadvantage.

Mr. Oliver Stanley: Could the hon. Gentleman say, in regard to these

particular materials, to what extent we are bound by long-term contracts to take them at more than the world market price?

Mr. Jay: There are no long-term contracts at fixed prices in the raw materials' field, but in some of the cases mentioned we do not always bind ourselves to sell a commodity at the price at which we bought it.

Colonel Crosthwaite-Eyre: As the Government in this instance are charging 25 per cent. more than the world prices can the hon. Gentleman state when those prices will fall to the level of world prices?

Mr. Jay: No, I can give no precise answer, but as world prices of some of these commodities vary from day to day, obviously we could not keep exactly in line in all cases.

Purchase Tax

Mr. Sparks: asked the Chancellor of the Exchequer what reductions have so far been made in Purchase Tax upon general household goods and commodities; and what is the gross value of those reductions and the individual amounts in each classified group.

Mr. Jay: I regret that information in this form is not available. I will, however, circulate in the OFFICIAL REPORT a list of the principal reductions made in the Finance Act, 1948, and subsequently by Treasury Order, at an estimated cost of about £60 million a year, additional to the reliefs accruing from extensions of the Utility Schemes.

Mr. Sparks: Could my hon. Friend say whether these reductions have, in the main, been passed on to the consumer?

Mr. Jay: So far as we know they have in the great majority of cases. The revenue has certainly been conceded by the Treasury.

Mr. Gallacher: Is the Minister aware that there is a very strong feeling that Purchase Tax should be removed from all household goods and necessities and will he draw the attention of his right hon. and learned Friend to that before the Finance Bill comes in so that the Purchase Tax may be removed as the people desire?

Mr. Jay: Purchase Tax has already been removed from the great majority of real necessities.

Following is the list:


Brief Description
Rate at 1st April 1948
Current Rate



Per cent.
Per cent.


Groups 1, 2, 3—




Silk garments
50
33⅓


Sheepskin garments, head gear and gloves for in dustrial use
50
33⅓


Non-Utility fur garments, headgear and gloves
125
100


Hand-knitted and hand embroidered garments
33⅓
Exempt


Hand-knitted and hand embroidered headgear and gloves
50
Exempt


Headgear, other non-Utility
50
33⅓


Gloves, other non-Utility
50
33⅓


Group—




Haberdashery of fur
125
100


Haberdashery, hand-knitted
50
Exempt


Haberdashery, other non Utility
50
33⅓


Group 5—




Domestic textile articles (non-Utility) of pile or woven-figured fabrics
125
66⅔


Non-Utility pillows, bolsters and mattresses
50
33⅓


Group 6—




Ribbons, etc., not more than 3 inches wide
50
33⅓


Pile and woven-figured fabrics (non-Utility)
125
66⅔


Group 8—




Fur skin, dressed
125
100


Group 9—




Certain tiles and strips for floor covering
50
Exempt


Fur rugs
125
100


Other floor coverings, except linoleum
50
33⅓


Group 10—




Paper towels and hand kerchiefs
50
Exempt


Group 11—




Glassware of cut glass
125
100


Galvanized baths not less than 42 inches long
33⅓
Exempt


Hardware, tableware, etc., except vessels for food and drink
50
33⅓


Furniture, non-Utility
50
33⅓


Group 12—




Vacuum cleaners, and other gas and electric appliances (except heaters)
50
33⅓


Gas space and water heating appliances
75
66⅔

Brief Description
Rate at 1st April,1948
Current Rate



Per cent.
Per cent.


Group 13—




Cutlery
50
33⅓


Group 14—




Lighting fittings
50
33–


Incandescent mantles
50
33⅓


Electric filament lamps
50
33⅓


Oil burning lamps
50
Exempt


Group 15—




Hand lamps and hand torches
50
33⅓


Group 16—




Electric lawn mowers
75
33⅓


Garden ornaments
125
100


Garden furniture
50
33⅓


Group 17—




Clocks and watches (not of gold or silver)
50
33⅓


Clocks and watches of gold and silver
125
100


Group 18—




Wireless and television sets and valves
50
33⅓


Group 19—




Pipe organs, etc
50
Exempt


Gramophone records not produced for general sale
50
Exempt


Group 20—




Toys and some sports goods
50
33⅓


Group 21—




Wooden walking sticks
50
33⅓


Group 23—




Trunks, bags, etc., of leather
125
100


Plain baskets
50
33⅓


Group 25—




Pictures, vases, etc.
125
100


Groups 26, 27, 28—




Jewellery, gold and silver ware, etc.
125
100


Group 29—




Most fancy goods
125
100


Group 30—




Hair-waving and hair-drying machines
50
33⅓


Group 31—




Electric dry shavers
125
33⅓


Brushes, combs, scissors, razors, toilet paper, etc.
50
33⅓


Other toilet requisites
125
100


Group 32—




Perfumery and cosmetics
125
100


Toilet soap, toothpaste and other toilet preparations
50
33⅓


Group 33—




A range of non-proprietary medicines; and certain other medicines used in dispensing
33⅓
Exempt


Group 34—




Stationery and office requisites
50
33⅓

Kano Aerodrome (Currency)

Colonel Crosthwaite-Eyre: asked the Chancellor of the Exchequer whether he is aware of the irritation caused to air passengers at Kano aerodrome by the refusal of the authorities to permit payment for refreshments in sterling or South African pounds; and if he will issue instructions that such payments can now be made.

Mr. Glenvil Hall: The question of what currency will be accepted in payment for refreshments at the Kano aerodrome is, of course, a matter for the Nigerian authorities. So far as United Kingdom residents are concerned, however, I am not aware that any inconvenience is caused by the present arrangements. United Kingdom residents travelling by air can pay for refreshments at the aerodrome in sterling area travellers' cheques, West African pounds or, if they are travelling by B.O.A.C., B.O.A.C. currency coupons purchased for sterling which are freely exchangeable into local currency at the aerodrome. I cannot agree to United Kindom sterling notes being used for such payments. Nor can I, of course, issue any instructions about South African pounds: this is a matter for the South African Government.

Colonel Crosthwaite-Eyre: May I ask the right hon. Gentleman whether he is aware that at Kano the least demonination of sterling one can change is £1 and that, even with the best will in the world, one cannot spend £1 on tea? One is, therefore, left with a large amount of Nigerian currency which is unchangeable anywhere else. At every other stop by any air service it is possible to exchange sterling or South African pounds. Surely, therefore, it would be only fair to everybody concerned to allow the same thing at Kano.

Mr. Glenvil Hall: This is a matter for the Nigerian authorities. Nevertheless, I would remind the hon. Member that it is possible for travellers going out there to take Nigerian currency and to have the allowance split here, before they go, by arrangement with their bank.

Mr. Stanley: Is the right hon. Gentleman seriously suggesting that before they leave on a trip of this kind

people ought to provide themselves with 2s. 6d. in Nigerian currency in case they want tea at Kano?

Mr. Glenvil Hall: No, but what I am suggesting is that this House should back the Government in order to see to it that we prevent currency from being freely exchanged abroad in defiance of the exchange control which exists.

Mr. W. Fletcher: Could the irritation possibly be removed by the free issue of a draught of groundnut oil easily obtainable at Kano?

Banks (Closing Days)

Mr. Lipson: asked the Chancellor of the Exchequer if he will permit branch banks in England and Wales to be closed to the public on 1st July next and 2nd January, 1950, to enable the staffs to deal with the balancing of books and the heavy dividend and interest load and to ensure smoother working and greater efficiency of service to the public on succeeding days.

Mr. Glenvil Hall: No, Sir, I would refer the hon. Member to the reply given on 18th November, 1947, by the Chancellor of the Exchequer to the hon. and learned Member for Brighton (Mr. Marlowe) and the hon. Member for Hackney, Central (Mr. H. Hynd). My right hon. and learned Friend has recently reviewed the question but sees no reason to alter his opinion that it would not be in the public interest to close the doors of the banks to the public on the days mentioned.

Mr. Lipson: As there is considerable evidence that it would be both in the public interest and in the interests of the staff that this heavy burden should be relieved by closing the banks to the public on those days, could the matter be considered, especially in view of the fact that this practice was followed during the war and was found of great benefit?

Mr. Glenvil Hall: They certainly were closed during the war, but it was because of the shortage of staff. I understand that the banks now have their staffs back and it does not, therefore, appear reasonable that the banks should be closed for these two extra days and that the public should be robbed of the facilities which otherwise would be provided.

Lieut.-Colonel Lipton: Is my right hon. Friend aware that in any event at the end of this year the banks will be closed to the public for one-and-a-half days?

Civil Service (Retiring Age)

Mr. Peter Freeman: asked the Financial Secretary to the Treasury whether, in view of the steady increase in longevity and the improvement in health of the nation and the urgent necessity of increased production, he will ensure that no person shall be dismissed from Government service on account of age before he has reached at least 65 years of age.

Mr. Glenvil Hall: So long as there is a manpower shortage Government Departments are instructed to employ men and women beyond the age of 60 in all cases where they are willing to stay and are fully fit and efficient in the duties of their grade and where there is a real need to retain their services. Established staff are allowed to retire at 60 but can be retained in an established capacity until they are 65 and even, exceptionally, beyond that age. Departments may retain temporary staff, or may re-employ retired established staff in a temporary capacity, after the age of 65.

Oral Answers to Questions — COTTON INDUSTRY

Re-equipment

Mr. Leslie Hale: asked the President of the Board of Trade whether he is now in a position to make a statement on the Government's present policy with reference to the re-equipment of the cotton industry.

The Parliamentary Secretary to the Board of Trade (Mr. John Edwards): The main policy governing this question is that which was stated during the Second Reading of the Cotton Spinning (Re-equipment Subsidy) Act, 1948. My hon. Friend will be aware that the period initially allowed under that Act for the placing of contracts expired at the end of April. An extension of this period to the 5th April, 1950, has now been made in view of the difficulties encountered by certain groups in framing their modernisation plans. I hope this modification will lead to further progress in placing contracts for re-equipment.

Mr. Hale: Would the Parliamentary Secretary say how many applications had been received under the Act by the appointed date; what assurance he has that a considerable number more will be forthcoming during the period of the extension; and whether he is aware that informed circles in Lancashire—by which I mean the progressive parts of Oldham—are very considerably concerned about the delay in the re-adaptation and re-equipment of the industry?

Mr. Edwards: So far, a total of 17 groups have been registered, comprising 284 mills and approximately 17½million spindles, which is about half of the spindles in the trade. I can only hope that, with the encouragement which has been given by the recent doubling of the initial Income Tax allowance on new capital equipment, there will be greater progress in the next year.

Japanese Competition

Squadron-Leader Fleming: asked the President of the Board of Trade whether any decision has yet been reached on the British proposal to send an Anglo-American mission to Japan to discuss the encouragement given, by the Allied Supreme Command, to Japanese concentration on cotton textiles to build up their export trade.

Mr. J. Edwards: No, Sir. Discussions are still in progress between the United Kingdom and the United States cotton textile industries on the proposal for a Joint Mission to Japan about the international trade in cotton textiles.

Squadron-Leader Fleming: While these discussions are taking place are His Majesty's Government taking any steps to prevent the dumping of Japanese textile goods in the Colonial markets, thereby endangering the staple industry of Lancashire?

Mr. Edwards: That is an entirely different matter and perhaps the hon. and gallant Member will put a question down upon it.

Liverpool Exchange

Mr. W. Fletcher: asked the President of the Board of Trade whether he will now consider the urgent question of re-opening the Liverpool Cotton Exchange.

Mr. J. Edwards: No, Sir. I would refer the hon. Member to the reply given to him on 18th January.

Mr. Fletcher: In view of the answer which has been given to Question No. 37, is the Minister aware that the urgency of re-opening the Liverpool Cotton Exchange and allowing the textile industry to compete in America and elsewhere is very much greater even than it was in January, and will he not reconsider the matter as one of prime and immediate importance?

Mr. Edwards: No, sir.

Mr. Selwyn Lloyd: May I ask the Minister whether he is satisfied with the present arrangements for the supply of raw cotton to the spinners?

Mr. Edwards: That is an entirely different matter, but I am completely satisfied that the re-opening of the Liverpool Cotton Exchange would not do away with the currency difficulties, which are the main cause of our present troubles.

Machinery

Mr. Fairhurst: asked the President of the Board of Trade how many spinning mills and weaving establishments have respaced their machinery; how many are in the process of so doing; and how many have not yet commenced such work.

Mr. J. Edwards: I regret that the detailed information requested is not available. A considerable amount of respacing has been carried out, and a sample inquiry of nearly 600 weaving sheds in fact showed that 60 per cent. had been respaced.

Mr. Fairhurst: asked the President of the Board of Trade how many automatic looms have been installed in the cotton textile industry since 1st July, 1946; and if he is satisfied with the present rate of delivery.

Mr. J. Edwards: The preliminary results of a recent survey of the cotton and rayon weaving industry showed that there were approximately 27,000 automatic looms, and approximately 3,000 Lancashire looms fitted with automatic attachments, in the industry on 1st September, 1948. These figures compared with 18,000 and 1,350 respectively

in 1939. Information concerning the position at 1st July, 1946, is not available, but the bulk of the increases have taken place since that date. I am not entirely satisfied with the recent rate of delivery of automatic looms to the home market, but an improvement has been arranged for the near future.

Subsidy

Mr. Fairhurst: asked the President of the Board of Trade what portion of the subsidy offered to the textile industry had been merited up to 31st March, 1949; and whether he is satisfied that full advantage is being taken of the Government's offer.

Mr. J. Edwards: No payment under the Cotton Spinning (Re-equipment Subsidy) Act, 1948, had been made up to 31st March, 1949. The first claims for subsidy have recently been made and are being examined. It is too early yet to measure the extent to which advantage is being taken of the scheme, but we have recently impressed upon the industry the need for quicker progress in submitting plans for modernisation.

Oral Answers to Questions — TRADE AND COMMERCE

New Factories, London and S.E. Region

Mr. Daggar: asked the President of the Board of Trade if he will state the number of new factories and extensions, respectively, that have been erected in the London and South-Eastern Region, also the number approved since December, 1944, up to the latest available date.

Mr. J. Edwards: A total of 148 new factories and 337 extensions to existing factories of 5,000 sq. ft. and over were approved in the London and South-Eastern Region during the period December, 1944, to February, 1949. Of these, 42 new factories and 98 extensions have been completed.

Imports (Statistics)

Mr. Collins: asked the President of the Board of Trade whether in order to provide a better basis for comparison with exports, he will, each month, publish the approximate f.o.b. value of monthly imports in addition to the c.i.f. value.

Mr. J. Edwards: No, Sir. In accordance with the International Convention relating to Economic Statistics signed by this country at Geneva in 1928, the statistics of imports into the United Kingdom published monthly in the Trade and Navigation Accounts must include the value of insurance and freight, and it would be very confusing if, in addition, estimated figures of imports on a f.o.b. basis were also published regularly. There are, moreover, difficulties in establishing a reliable estimate in the difference of the value of imports calculated on a f.o.b. and c.i.f. basis. We are, however, having the difficulties investigated, and hope that it may be possible to assess the relative importance of the value of insurance and freight included in the published figures.

Exports (Europe and Canada)

Vice-Admiral Taylor: asked the President of the Board of Trade if he will state the quantity and value of steel, machinery and other goods desired by Canada, which have been sold to the Union of Soviet Socialist Republics, Poland, Czechoslovakia and other European countries during the past two years; and why these goods were allocated to those countries rather than to Canada.

Mr. J. Edwards: With the hon. and gallant Member's permission, I will circulate in the OFFICIAL REPORT figures showing actual United Kingdom exports of steel, machinery and other goods to the countries in question for 1947 and 1948, but he will appreciate that these figures do not provide any general assessment of what Canadian importers desired to buy from United Kingdom exporters. As regards goods subject at the time to allocation or analogous arrangements, I may say that, with the exception of finished steel, I have no evidence that, if we had failed to send the quantities in question to Europe, they would necessarily have been purchased by Canadian importers. By selling small quantities of steel we secure in return the entry to these markets for much larger quantities of goods which are not readily saleable in Canada and thus increase our power to purchase essential foodstuffs and raw materials. I may add that exports are not now allocated by markets,

but, in the guidance exporters are given about the relative desirability of the various markets, we have repeatedly emphasised that Canada and the United States should come first.

Vice-Admiral Taylor: Can it be denied that Canada has not received those articles from this country to the full amount she desired, and that some of those articles were sold to other countries unfriendly to us, that they might send back other goods that we did not want? In view of the fact that it is necessary to increase our dollar savings to the utmost amount possible, and also in view of the immense contributions of Canada to this country since the war, is it not incumbent on us to meet the wishes of Canada, and to let her have all the goods she desires to take from us?

Mr. Edwards: I do not accept all the implications of the hon. and gallant Member's remarks. The figures of exports to Canada for 1947 and 1948, respectively, were £44 million and £70 million, which, by comparison with the figures for our European exports, were high, and so I think that the hon. and gallant Gentleman will agree that it is quite wrong of him to suggest that we are neglecting the Canadian market. Nevertheless, I accept his main conclusion that it is our business to expand this market in every way we can.

Mr. Gallacher: In view of the statement made by the Chancellor of the Exchequer about the baffling problem of the dollar deficit, and the fact that America and Canada demand dollar payments, is it not desirable that the greatest possible measure of trade should be developed with the Soviet Union and other countries of Eastern Europe?

Mr. Eden: To clarify this position, may I ask whether what the hon. Gentleman has said covers the question of tinplate, in respect of which, certainly in January, I found a good deal of Canadian anxiety, because of the belief that it was going to Russia and Poland, and Canada would have liked it for the tinning of salmon?

Mr. Edwards: Perhaps, the right hon. Gentleman would put that question down.

Following are the figures:

UNITED KINGDOM EXPORTS


—
Iron and Steel (a)
Machinery
Other Goods
Total


1947
1948
1947
1948
1947
1948
1947
1948


Tons
£'000
Tons
£'000
Tons
£'000
Tons
£'000
£'000
£'000
£'000
£'000


To:


Canada
…
22,971
1,032
41,622
1,845
10,978
3,663
13,995
5,120
38,787
62,621
43,482
69,586


Soviet Union
…
2,544
168
21,314
474
47,307
10,408
8,962
3,538
1,696
1,298
12,272
5,310


Poland
…
964
141
2,423
401
5,281
997
6,192
1,120
6,445
5,697
7,583
7,218


Czechoslovakia
…
5,231
595
759
125
4,489
1,312
4,688
1,457
5,969
3,968
7,876
5,550


All Other European Countries (b)
…
629,738
28,116
659,525
34,200
187,494
49,435
255,085
73,206
282,711
390,656
360,262
498,062


(a) Comprises in addition to iron and steel, certain manufactures thereof. Separate figures for iron and steel are not readily available.


(b) All countries in Europe, including Iceland, the Faroes, Turkey (European and Asiatic), Cyprus, Azores, Madeira and Malta.

Colliery Tip, Wales (Removal)

Mr. Daggar: asked the President of the Board of Trade if he will state the number of acres of land that will be made available for other purposes upon the removal or levelling of the Beiliglas colliery tip at Gwaun-cae-Gurwen, Wales.

Mr. J. Edwards: The first proposals for the clearance of this tip were rejected because we did not consider that the results would justify the expense. The local authority have been invited to submit amended proposals, but these have not yet reached the Board of Trade, and I am therefore unable to state what acreage of cleared land may result if it should be decided eventually to make a grant in respect of the scheme.

Children's Clothing (Supplies)

Mr. Peter Freeman: asked the President of the Board of Trade whether he is aware of the great shortage and increased prices of children's shoes, clothing and underwear; and what steps are being taken to augment the supply of these goods.

Mr. J. Edwards: There is no general shortage of these goods; for example, supplies of children's shoes to the home market are about one-third higher than pre-war. There are, however, shortages of a few kinds and qualities for which all practicable steps to improve home supplies are being taken. As regards prices, there have been some increases, due mainly to increased raw material costs, but there have also been some decreases.

Mr. Freeman: Is my hon. Friend aware of the widespread discontent there is over this matter, and especially because there is a large number of fancy articles at very high prices but a shortage of the more ordinary things children want?

Mr. Edwards: If my hon. Friend will give me examples of cases he has in mind I will gladly look into them.

"The Times" (Students)

Mr. Blackburn: asked the President of the Board of Trade whether, in view of the decision of the Newsprint Rationing Committee that the scheme of "The

Times" newspaper enabling students to buy it at reduced rates must cease, although the sales so made are not included in the circulation figures of "The Times," he will instruct the committee to amend its regulations so that the scheme may continue.

Mr. J. Edwards: One of the considerations which influenced my right hon. Friend in agreeing to the restoration of the unrestricted circulation of newspapers at the beginning of this year, was the rule of the Newsprint Rationing Committee prohibiting newspapers from canvassing for orders by any method and offers of any benefit to members of the public as an inducement to purchase. In the circumstances, he has not felt called upon to intervene in the case to which my hon. Friend refers, although he has observed a reference to it in the Press.

Mr. Blackburn: Is the Minister aware that students have now enjoyed and valued this concession for over 20 years? Is it not really a little unfair of the Labour Government that we should be put into this situation, in which we are taking away a concession for which we have to pay nothing, from a very important and sometimes indigent section of the community?

Mr. Edwards: I have every sympathy with my hon. Friend's point. Indeed, I once profited by this arrangement myself. However, this is a matter primarily for the newspaper industry. If either "The Times" or anyone else cares to refer the case to us, we will consider it, but it is a matter in the first instance for them.

Squadron-Leader Fleming: Was this particular regulation put before the President of the Board of Trade and sanctioned by him before it came into operation?

Mr. Edwards: This is an arrangement which is made by the newspaper people themselves, and is not a matter for which the Board of Trade takes the responsibility.

Mr. Skeffington-Lodge: In view of the seriousness of any further rise in the cost of living to the clergy of the Church of England, can my hon. Friend say whether this decision of the Newsprint Rationing Committee will alter the present arrangement whereby clergy can buy "The Times newspaper at a reduced rate?

Mr. Edwards: I should like notice of that question.

Mr. Lipson: In view of the fact that this concession does not come within the category to which my hon. Friend has drawn attention, could not the President of the Board of Trade make representations, without giving directions, that he regrets this decision, to see if it can be withdrawn?

Mr. Edwards: I should not be willing to suggest my right hon. Friend's intervention in the case. It is a matter for the newspaper people themselves, unless they wish to bring it in front of us. It is not our business but theirs in the first instance.

Mr. Emrys Roberts: Would the hon. Gentleman make it clear that this kind of concession cannot by any means be described as canvassing for orders? Could he not make that clear to the Newsprint Rationing Committee?

Mr. Messer: Ought they not to know that?

Mr. Blackburn: In view of the fact that there is fairly strong feeling on this matter, would my hon. Friend be good enough to receive some hon. Members about it, to see if he can use his good offices to restore the concession?

Mr. Edwards: I should be very happy to discuss the matter with hon. Members on either side of the House, but I cannot agree to commit my right hon. Friend to intervention.

BILL PRESENTED

IRELAND BILL

"to recognise and declare the constitutional position as to the part of Ireland heretofore known as Eire, and to make provision as to the name by which it may be known and the manner in which the law is to apply in relation to it; to declare and affirm the constitutional position and the territorial integrity of Northern Ireland and to amend, as respects the Parliament of the United Kingdom, the law relating to the qualifications of electors in constituencies in Northern, Ireland; and for purposes connected with the matters aforesaid," presented by the Prime Minister, supported by Mr. Herbert Morrison, Mr. Ede, Mr. P. Noel-Baker and The Attorney-General; read the First time; to be read a Second time upon Thursday, and to be printed. [Bill 119.]

Mr. Gallacher: There is a point which I should like to raise.

Mr. Speaker: The Bill is not printed yet; there can be no point about it.

Orders of the Day — IRON AND STEEL BILL

As amended (in the Standing Committee), further considered.

[4TH ALLOTTED DAY]

3.32 p.m.

Mr. Oliver Lyttelton: On a point of Order. May I ask you, Mr. Speaker, whether, in the event of the Report stage of the Bill being concluded before ten o'clock, you propose to call a Motion on the Order Paper in my name and the names of my right hon. and hon. Friends on this side to recommit the Bill in respect of certain Amendments to Clause 15, dealing with compensation?

The Lord President of the Council (Mr. Herbert Morrison): So far as the Government are concerned, and subject to your seeing no objection, Mr. Speaker, we see no objection to the method proposed by the right hon. Gentleman.

Mr. Speaker: Of course, if a complete recommittal were proposed, I think it would be out of Order under the Guillotine procedure. As it is a recommittal in respect of certain Amendments to a Clause, it is in Order, and the only qualification I have to make is that I shall call it if there is time.

Clause 35.—(GENERAL RESERVE.)

Mr. Lyttelton: I beg to move, in page 40, line 34, to leave out "replacements," and to insert:
depreciation of assets or renewal of assets.
This is a very limited matter. In Clause 37 it is provided that proper provision for depreciation of assets or for renewal of assets shall be included as outgoings properly chargeable to revenue account. It would appear that Clause 35, which is worded differently, is intended to have a different meaning. The object of the Amendment is to try to bring the two Clauses into line if, indeed, the same intention is covered by both. It is little more than a drafting Amendment. If I have not interpreted the intention correctly, perhaps the right hon. Gentleman will correct me?

The Financial Secretary to the Treasury (Mr. Glenvil Hall): We have had this matter raised before in previous nationalisation Measures, and if my recollection

serves me aright, we have had discussions on this point. Wording such as this was included in the Transport Act, in the Electricity Act and, to my own recollection, in the Gas Act. I cannot help thinking that the right hon. Gentleman and his hon. Friends are forgetting that Clause 37 deals with the point which he has in mind, and deals with the question of depreciation and renewal of assets. I must admit that when the right hon. Gentleman was speaking my attention was distracted, and that he may have put this point to me. If so, I apologise. What I am saying now is that in our view the word "replacements" is the correct word, and I must ask the House to adhere to it.

Mr. Lyttelton: The right hon. Gentleman's argument was addressed to the precise point which I was making, and he reinforced the statement I made in everything that he said. That goes to show the great loss to the public interest when what I say is not properly appreciated on the other side of the House. Clause 37 provides that proper provision shall be made for depreciation of assets and for renewal of assets and that they are properly chargeable against revenue. Under this Clause, however, it appears that depreciation is of intent left out of the wording of the Clause, and the Amendment seeks to bring the two Clauses into line. As the right hon. Gentleman has said that what is really meant are the words contained in Clause 37, I take it that he will accept the Amendment to add these words to Clause 35 in order to make the two Clauses agree.

Mr. Glenvil Hall: There is no need to do that.

Mr. Lyttelton: There is.

Mr. Glenvil Hall: No. What this Clause does is to give the Corporation power to establish a general reserve. The point which the right hon. Gentleman has in mind is dealt with, as he himself has said, in Clause 37. We must, so it seems to us, leave to the Corporation the right to establish this reserve in its own way and not lay down any hard-and-fast rule for that purpose. If the right hon. Gentleman will look at the wording of the Clause, he will see the word "replacements," and then the Clause continues: or other purposes." I think that those words are wide enough to effect anything


that the Corporation may want to do, and I hope that the House will adhere to the wording as it is.

Mr. Lyttelton: I must say that I feel somewhat frustrated in my inability to get the right hon Gentleman to grasp what seems to me to be an extremely simple point. In Clause 37 we have the exhortation, if I may put it that way, about the sums which are chargeable to revenue account, and it specifically says that amongst those sums which are to be chargeable are amounts set to depreciation. In Clause 35 the word "depreciation" is, apparently of intent, left out, and anyone reading the two Clauses together would imagine, since the wording is different, that the intention is different. I hope that I have now made the point crystal clear, and it is not a metaphysical point. If the intention is different, let us hear what it is. If the intention is the same, let us have the same words to express the same intention. It is no good the right hon. Gentleman saying that Clause 37 covers the matter in Clause 35. because it does not. This Clause deals with the power of the Corporation to create a general reserve with certain reserves for replacements and depreciation, and Clause 37 deals with the sums to be charged to revenue account. These are two entirely different things. Clause 35 begins:
Without prejudice to the Corporation's power to establish appropriate reserves for replacements.…
and later on we find also that depreciation is to be chargeable to revenue. Unless there is some change of intention, one would expect to see the words "or depreciation" after the word "replacements." I am completely frustrated to know how I can convey my meaning in any clearer words.

Mr. Mitchison: For myself, I find the Amendment muddy and obscure, and I hope the right hon. Gentleman and his hon. Friends will make it clearer—crystal clear I think is what they want. Under Clause 37 there has to be proper provision for depreciation of assets or for renewal of assets. It is only after that that proper allocations are to be made to the general reserve. If I understand the Amendment rightly, it is now proposed that in Clause 35, which

deals with the general reserve, provision should be made for the very things which have to be provided for before anything can be put to the general reserve. If that is crystal clear, if it is anything but muddy and obscure, I hope we shall have some explanation of how there is to be credited to the general reserve something for which provision will already have been made before coming to the general reserve.

Mr. Selwyn Lloyd: The hon. and learned Member for Kettering (Mr. Mitchison), in one of his very useful interventions, has made the situation very much more obscure than it was before, because it is now quite impossible for the Financial Secretary to ride off in the way he sought to do: These expressions have very definite connotations for tax purposes, and the questions of replacement allowances, wear and tear allowances, and depreciation allowances are very different things. I think the hon. and learned Member is suggesting, inferentially, that "replacement" is included in "renewal of assets."

Mr. Mitchison: No.

Mr. Selwyn Lloyd: If it is not included in "renewal of assets," what does the expression "renewal of assets" mean? In Clause 37 two matters are referred to. There is depreciation, which is fairly easily understandable, and renewal of assets, and there is a duty upon the Corporation to ensure that each company provides out of current revenue adequate allowances for these two matters. If those two matters are provided for, what is the purpose of this extra provision out of general reserve? Of course, the reason for having provision in the general reserve for depreciation is because, on the values from year to year, the allowances for depreciation may not be adequate owing to increasing costs of replacement and renewal. Therefore, any prudently managed concern will seek to have in its general reserve a substantial figure which it can use under certain contingencies to make up inadequate allowance for depreciation.

Mr. Mitchison: If the hon. and learned Member looks at Clause 37, he will see that that point is met, because there has to be not only provision but proper provision for those two things. What I confess still puzzles me is why, when proper provision is made before coming to the


general reserve, it is suggested that we should do something which ought already to have been done.

Mr. Selwyn Lloyd: The answer to that point is that provision may at the time seem perfectly proper, and it may seem to be completely adequate, but at the same time it is wise to have a general reserve to cover certain contingencies. If, as I understand it—and this is where the Financial Secretary and his hon. and learned Friend appeared to be at variance—the right hon. Gentleman does intend to have a general reserve to cover the sort of contingencies that I imagine, why does he not state that that general reserve should be for the same purposes? Is he not simply adding a note of confusion and uncertainty by using different phraseology in the two Clauses.

Mr. Mitchison: Is the hon. and learned Gentleman now suggesting that in Clause 37 "proper" means "insufficient"?

Mr. Selwyn Lloyd: I thought my point was perfectly clear. As I understand it, Clause 37 deals with what is to be charged to revenue account in each year. It may be that in addition to what is charged to revenue account—in other words, the amount the tax authorities are prepared to allow in respect of depreciation allowance—it is wise to have a general reserve to cover certain contingencies. In other words, Clause 37 deals with the year-to-year position and Clause 35 seeks to make some longer-term provision.

3.45 p.m.

Mr. Glenvil Hall: I again apologise for not hearing what the right hon. Gentleman said in his first speech. In the general movement of Members out of the Chamber, I could not catch what he was saying. I think I now completely understand what he has in mind. What my hon. and learned Friend the Member for Kettering (Mr. Mitchison) has said establishes what is the position. In our view, it would be wrong to take out the word "replacements" and to insert, as suggested, "depreciation of assets or renewal of assets," because they are taken from Clause 37. In Clause 35, we want to give the Corporation elasticity when they establish their reserve. They can put to reserve, to expend later, such sums as they have put by for renewal of assets. There is not the slightest doubt about that. If we stick to these

words and those which follow—"or other purposes"—they can put to reserve moneys to meet forthcoming or accruing taxation. Therefore, in our view the word "replacements" is the correct word.
An additional reason why we should retain these words is that we have used them in earlier Measures. If we now depart from what was then well understood and is now embodied in Acts of Parliament, although we may mean the same thing when we use another form of words, it might mean that those who have to go through Acts of Parliament in order to discover what was the intention of Parliament would begin to think that we here intended something different from what we intended in previous Acts. We intend exactly the same. Therefore, I repeat the hope that the House will retain the word "replacements."

Mr. Lyttelton: I am unwilling to pursue this matter, which seems to me to be a very small one. Every time the Financial Secretary speaks he gets deeper and deeper—

Mr. Speaker: I hate to interrupt the right hon. Gentleman, but I must point out that we are on the Report stage, and that the making of speeches from one side and another without leave of the House is undesirable.

Mr. Lyttelton: As I moved the Amendment, I thought I could speak again.

Mr. Speaker: The right hon. Gentleman is quite correct. As he moved the Amendment, he can speak again, but nobody else ought to do so, except the Government spokesman.

Mr. Lyttelton: I have no intention of abusing the fortunate position I occupy as the Mover of this Amendment. I would only say to the Financial Secretary that three different forms of wording are used in different places: there is "replacements," "renewal of assets," and, thirdly, "depreciation of assets." We all know that "depreciation of assets" is different from the other two. The right hon. Gentleman is now trying to draw a distinction between "replacements" and "renewal of assets," and goes on to say that they mean exactly the same thing, and that that is why different words have been used. A general principle which


he will find very useful is, when he means the same thing in a Bill to use the same words. That would save a lot of time. I am fairly content to know that the intention is the same. Perhaps between now and the time when the Bill reaches another place, the Government might consider using the same words to denote the same thing. With those emollient phrases, I beg to ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Mr. Lyttelton: I beg to move, in page 41, line 3, after "directions," to insert: "in pursuance of section four of this Act."

Mr. Speaker: I think it might be convenient to discuss also the proposed Amendment in line 9, at end, insert:
(c) the amount of the said reserve shall not at any time exceed 10 per centum of the total issued amount of British Iron and Steel stock at that time.

Mr. Lyttelton: Under Clause 4 powers are given to the Minister to make directions in relation to matters which appear to him to affect the national interest. The "national interest" is one of those meaningless phrases the extent of which it is extremely difficult to appreciate. It may mean the fixing of a price or doing anything under this Clause which lies with the people employed in the industry, with the people who consume the products or with the Government who wish to protect the industry. It is no good saying that everyone knows what the national interest is, because it is difficult to define. It is a little naive in all these Bills to talk about the national interest.
I do not want to be led from the particular point I am about to develop. The powers under Clause 4 are given to the Minister in order that he may intervene in relation to matters which appear to him to affect the national interest. If he attaches greater weight to what is the national interest then it covers my point. However, he may give directions in relation to the management of reserves, but that is carrying intervention or interference much too far. His powers should be confined to issuing directions about the reserves only where he considered it in the national interest.
It would be better if powers of a specific kind were given to him which

would give a special control over the way in which the Corporation establishes a reserve, and if that reserve took the form of cash, in what direction that cash could be invested. It ought to be stated in the Bill whether the Minister intends to use his power with regard to the reserves only. Has he to consider whether the national interest is at stake or is he putting his finger into this particular pie as a right, even when it is not considered a matter of national importance?

The Solicitor-General (Sir Frank Soskice): The Clause as it stands indicates specifically that the Minister's power to give directions is not to be limited to the power to give general directions such as are specified in Clause 4 (1). Subsection (2, b) contains the words:
…notwithstanding that the directions may be of a specific character.…
If the difficulty that the right hon. Gentleman feels is that there is an uncertainty about what the directions can cover, the answer is that it is quite clearly stated in the Clause that they can be specific. The Minister will, of course, only give directions which are in the general interest. This will be the guiding motive which he will always follow in whatever direction he may give whether of a general or a specific character. He must have power to give specific direction in cases connected with the general reserve fund. Hon. Members opposite should bear in mind that the fund may be very large indeed. They have an Amendment on the Order Paper asking that the fund should not exceed 10 per cent. of the stock issued by the Corporation.

Mr. Selwyn Lloyd: On a point of Order. Mr. Speaker, would you resolve the difficulty which I am in? I thought you said that we should discuss the Amendment to line 2 and with it deal with the Amendment to line 9.

Mr. Speaker: That is what my intention was, and I was rather listening to hear something about the Amendment to line 9.

Mr. Lyttelton: I addressed myself to the Amendment to line 3. I did not think that the Amendment to line 2 after "shall," insert "subject to the provisions of this subsection," had been called.

The Solicitor-General: I was in some doubt myself as to what Amendment I


should answer. I thought the right hon. Gentleman was addressing himself to the Amendments to line 2 and line 3.

Mr. Speaker: As apparently we have passed line 2 we had better deal with line 3, and if necessary we have the Amendment to line 9 over the page and we can deal with it when we reach it.

The Solicitor-General: I will if I may conclude the argument that I was presenting. I was endeavouring to answer the right hon. Gentleman's argument by reminding the House that this fund may be very large. There is no statutory limitation imposed upon it but its size is left to the Corporation. It may be very large indeed, and it is felt that the Minister should be empowered to give specific directions about it. If I may give an example; it may be envisaged that specific directions should be given on how the fund should be used. It may be for the purpose specified under subsection (3), which is a declaratory section that one of the purposes of the fund is to check undue fluctuations in prices.
It may be that the Minister would want to give a specific direction on that, and in view of what I have said it is right that the Minister should have the power to give specific and well as general directions in the case of these very large reserves, which will be available. That is the power which the Clause at present gives, and for those reasons I hope the House will not accept the Amendment.

Mr. Selwyn Lloyd: The right hon. and learned Gentleman spoke about using the reserve fund to check undue fluctuations. Would that be consistent with the duty under Clause 31 to make the revenue of the Corporation not less than sufficient to meet their combined outgoings?

The Solicitor-General: That would be entirely consistent. The checking would obviously have to be done in the light of the duty imposed by Clause 31.

Viscount Hinchingbrooke: I do not think the reply by the right hon. and learned Gentleman is entirely satisfactory because it does not meet the precise point we were on. The point is that Clause 4 deals with the powers of the Minister in relation to the

Corporation and sets them out. They are general powers. They do not go on to specify any particular point of detail which the Minister might deal in intervening on this question of reserves held by the Corporation. On going through the Bill we can find that the Minister is given powers of a specific character which are not related at all to the general powers that are taken in Clause 4. All we seek to do by this Amendment is to tie the specific powers of the Minister back to the general intent of Clause 4. I do not think the right hon. and learned Gentleman has dealt with that point, and the reply which he has given is, to my mind, still unsatisfactory.

4.0 p.m.

Mr. Ivor Thomas: The explanation given by the Solicitor-General seems to make it clear that the powers which the Government seek in this Clause are an unjustifiable interference with the powers of management of the Corporation. That is a subject never yet fully resolved in this House. It is clear also from his explanation that this provision is part of a general policy for the direction of investment. I submit that the control of the reserve fund of the Iron and Steel Corporation is a matter which should be left to the unfettered discretion of that Corporation. If the Government wish to influence the control of investment—I agree that that is a most important part of the development of policy—let them make regulations which apply to all investment funds and not simply to the reserve funds of socialised industries.
It may very well happen that the powers now proposed will have very serious deleterious effects upon the management of the Corporation. It is not very long since we saw the Treasury pursuing a very hard drive for cheaper money. Under such a policy the Treasury might very well require the Corporation to invest their money in a manner which would not be in the commercial interests of the Corporation and possibly might not be in the best interest of the nation as understood by other persons. I seriously suggest that this proposal is rather a grave infraction of the powers of management of the Corporation. I do not wish to suggest for a moment that control of investment is not a most important subject, but I ask that we should not have discriminatory provisions of this


nature. Let us treat the control of investment as a matter of general financial policy and not as a part of a policy only for socialised industries.

Mr. Mikardo: The speech of the hon. Member for Keighley (Mr. Ivor Thomas) leaves me very puzzled. Throughout most of the proceedings on the nationalisation Measures, and certainly during the Committee stage of this Measure, we have heard insistent demands from the Opposition for a greater degree of accountability to Parliament in the operation of this industry. Over and over again we have heard hon. Members opposite complain. I, for one, believe that those complaints have some justification, and that in some of the nationalised industries the corporations seem to have powers which we as a House of Commons cannot get at to query.
Now the hon. Member for Keighley, presumably reflecting the views of his hon. Friends, is saying that he wants discretion in the matter of investment of the Corporation's reserves—he himself says that it is an extremely important matter—to rest entirely with the Corporation, to be exercised without any influence by the Minister and hence to be exercised without any possibility of this House querying any exercise of those powers.

Mr. Ivor Thomas: indicated dissent.

Mr. Mikardo: The hon. Gentleman may shake his head but that is exactly the purport of what he was saying. I am sure he will appreciate that if the Clause remains as it is worded and the Minister gives directions to the Corporation to spend its reserves in a way of which the hon. Gentleman does not approve, he would not be slow in bringing that, matter to the attention of the House by Question or in any of the other ways afforded by the procedure of the House, so that we could debate it and call to account the action of the Minister in deciding that particular expenditure. If we did what the hon. Member is now asking us to do, that remedy for that grievance would then not be open to him.
I suggest that he is taking a line which is very different from that of the Opposition and one which on the whole is not in the best interests of democratic

control of public corporations in an important matter such as the spending of their reserves in investments, because we should have taken the matter out of the hands of the Minister and hence out of the control of Parliament.

Lieut.-Commander Gurney Braithwaite: I did not hear my hon. Friend the Member for Keighley (Mr. Ivor Thomas) express the views which have just been attributed to him. The main point concerns the administration of the reserve fund. I think it will be primarily at the disposal of the industry. The hon. Member for Reading (Mr. Mikardo) has just instanced capital re-equipment and the like, as opposed to the possibility which I thought was envisaged by the Solicitor-General a few minutes ago when he referred to investment. It is true that the Clause says that the approval of the Treasury comes into the matter. It is not difficult to see just what that may mean.
We all know that not long ago the Government were anxious to establish their credit upon a 2½per cent. basis, and that reserves of all kinds were poured into the gilt-edged market with a view to bringing it to the 2½per cent. level upon which future loans could be launched. In that procedure, a good many unfortunate things happened. I forget the exact amount, but a very large portion of the Unemployment Fund was invested in Treasury 2½ per cents., with which the name of the Chancellor of the Duchy of Lancaster will always be associated, with a capital loss of 35 per cent. When that matter was raised on this side of the House we were told by the present Chancellor of the Exchequer that it was not lost but had merely gone before; that it had not been realised, and that there was no loss until it had. The fact remains that there is a very serious book loss.
I am sure that hon. Members on both sides of the House would be anxious to avoid that sort of thing happening to the reserve fund earmarked for the purpose of the steel industry. It would be valuable to have an assurance from the Minister that this reserve fund is not to be treated as a convenient hen roost to be raided whenever it is necessary to bolster up Government credit for the purpose of borrowing under some nationalisation scheme, or issuing a new Government loan for this purpose or that, but that it will be


safeguarded for the purposes instanced by the hon. Member for Reading. If, as a result of this discussion, we could get an undertaking of that kind we should be happy on both sides of the House.

Mr. Sydney Silverman: The hon. Member for Keighley (Mr. Ivor Thomas) puzzles me more and more. When a man sacrifices the convictions of a lifetime, he presumably does so on account of something that is of great importance to him. The hon. Member for Keighley has repeatedly declared that it was the Bill which made him take that step. Therefore I have followed his speeches in this Report stage—I was not on the Comm.jttee—with the utmost attention, to try to understand the point of principle—a point of detail would not have influenced the hon. Member—on which he was, quarrelling with the Government.
I have heard his speeches this afternoon and on Wednesday and Thursday of last week. On one day we had a Clause giving the Minister in certain ways a measure of answerability to the House of Commons for his handling of this industry. The hon. Member for Keighley was not satisfied, not because he did not want the Minister to be answerable but because he thought that the measure of answerability was not sufficient.

Mr. Ivor Thomas: I merely asked a question.

Mr. Silverman: The hon. Member made a long speech in which he said in effect, "I am all for legislating about this important matter in such a way as to give to the House the maximum of control." Because the Clause did not do that—he did not oppose the Clause because he went part of the way with it—he subjected it to a drastic examination to show how illusory the control of the House of Commons was going to be. The Clause went through. Next day we had a Clause about subsidies. The hon. Gentleman went a very long way and said, "No subsidies at all because when we have the opportunity of getting subsidies there is a great temptation to apply for them and to cheat and in such circumstances temptation is not resisted and the country is defrauded." He was against subsidies altogether, but the House accepted the Clause with the subsidies. We are therefore to pay a subsidy and there is to be some measure

of accountability in the House of Commons with which the hon. Member is not satisfied. He wants more.
What does he say this afternoon? We have a Clause which requires that there shall be a reserve fund and gives the Minister power to make directions generally speaking with regard to the administration and application of the reserve fund. Subsection (3) directly provides that the purposes of the general reserve include the checking of undue fluctuations in the prices of products of the Corporation. The matter of undue fluctuations of the prices has a direct bearing on the matter of subsidies with which the hon. Member was so very closely interested. Obviously if we are to pay subsidies we have the greatest possible interest in seeing that prices at any rate are not so managed as to make our liability to pay subsidies greater. Therefore it is impossible to see how we could possibly control the administration of these matters in such a way as to avoid the unnecessary payment of subsidies, unless there is a reserve fund applicable to it and the Minister has some powers with regard to the administration of the fund.

Mr. Lyttelton: Will the hon. Gentleman concede that if his arguments are correct, it might well be described as in the national interest for us to control fluctuations? What I am concerned about is carrying the thing down to particular investments.

Mr. Silverman: Perhaps the right hon. Gentleman will permit me to deal with one argument at a time. I dare say there is something in what he has said—I do not dissent from it for a moment—but I am dealing with the hon. Member for Keighley who is against this because he says it is an unwarrantable interference with the private right of the corporation to manage its own reserves. I am utterly and completely puzzled about what the hon. Member wants and why he quarrelled with the Government and his colleagues, because on one occasion he advocates no subsidies and more control and on this occasion, when we are discussing the Government having the opportunity of administering by parliamentary accountability and responsibility—the only method whereby subsidies can be controlled—he is against it and says it is an unwarrantable interference with the private right of the Corporation.
If we are to control these matters we need a reserve fund having among its objects the direct object of controlling fluctuations in prices, power for the Minister to interfere in that matter, and, ultimately, the right of the House of Commons to call upon the Minister to account to the House for what he does under these provisions. I should have thought on the arguments of the hon. Member on the other matters to which I have referred that he would have welcomed the Clause enthusiastically. Instead of that, he rejects it on grounds which utterly destroy the intelligibility of the arguments he was advancing to the House on Wednesday and Thursday.
The hon. Member has got himself into a complete muddle about this matter and he ought to start thinking about it again from the beginning. Is he in favour of the nationalisation of industries basic and essential and vital to the life of the community or is he against it? If he is in favour of it or some of it, does he want it in such a way as to give the House of Commons some kind of control or does he want a completely unrestricted, uncontrolled and undirected private monopoly? He must make up his mind because he has taken an important step and adopted an important attitude. I am afraid that if he continues to make contributions of this kind many of us will be driven to the conclusion that he has not been quite candid to the House or to the country as to his reasons for quarrelling with his colleagues.

4.15 p.m.

Mr. Manningham-Buller: The hon. Member for Nelson and Colne (Mr. S. Silverman) has devoted considerable time to replying to what he thought was the speech of the hon. Member for Keighley (Mr. Ivor Thomas), but having listened to the hon. Member for Nelson and Colne, I am completely at a loss to understand whether he was speaking for or against this simple and innocuous Amendment. Will the right hon. and learned Gentleman give the Amendment a little more consideration? I do not believe that its acceptance would in any way detract from the Bill; it would improve it. He drew attention to the fact that under Clause 4 (1) there is power to give general directions, whereas under Clause 35 (2, b) there is power to give

specific directions. He emphasised the necessity for giving specific directions. I want him to consider this. Why it it that under Clause 4 (1) we have the specific requirement that directions must be in the national interest and yet those words are omitted from this Clause?
All the Amendment seeks to do is to provide that in giving his directions under this Clause the Minister shall do so in the national interest. It will not stop him giving specific directions. It may to some extent limit the field of those directions by providing that the directions must be in the national interest. I want the right hon. and learned Gentleman again to consider whether he can accept these words which, on his own statement, appear merely to implement what he says is the intention here. So far as the hon. Member for Reading (Mr. Mikardo) is concerned, acceptance or the Amendment would not deprive the House of any opportunity it now has under the Clause of putting questions to the Minister as to the exercise of his powers of giving direction. All the Amendment does is to insert the words which the Government thought necessary to insert in Clause 4 (1), putting them in by reference to Clause 4. We could save a lot of time if the right hon. and learned Gentleman would accept the Amendment.

Amendment negatived.

Mr. Lyttelton: I beg to move, in page 41, line 6, to leave out "or the application thereof."
The arguments covering this Amendment have already been expressed in our discussion on the previous Amendment, and I will not repeat them. I want to refer to one point on which the hon. Member for Nelson and Colne (Mr. S. Silverman) touched. I see the force of saying that if we wish to use this reserve for controlling the fluctuations in the price of a certain product, that certainly affects the matter of subsidies to which he referred, but I would say that that is a matter of national scope. What I am seeking to do, rightly or wrongly, is to prevent the Minister from assuming the burden of responsibility of giving specific directions to the Corporation about investment in companies which may be outside the iron and steel industry.

Mr. S. Silverman: I take it that the object of the right hon. Gentleman


throughout this series of Amendments is to make sure that the Minister gives directions only on matters where the national interest is concerned, but is he not making a great deal of bother out of a small point? The words he wants to modify are those at the beginning of paragraph (b):
the power of the Minister to give directions…
The only powers the Minister has in this Bill to give directions are those under Clause 4, which are powers to give directions in the national interest.

Mr. Lyttelton: The object of our previous Amendment was to bring these powers within the ambit of Clause 4. I am not saying that the hon. Gentleman is wrong but, as I read it, the Minister here is taking powers different from those given to him under Clause 4.

Mr. Silverman: But how can they be?

Mr. Lyttelton: I think the Law Officers must answer because then we shall only have to deal with them once.

Mr. Silverman: But the right hon. Gentleman must make the point before it can be answered.

Mr. Lyttelton: I am making this point, that as I read the Bill, the powers which the Minister is taking over the investments of these reserves are of a specific nature and not directly related to the powers which he takes under Clause 4 (1). I say that under Clause 4 (1) he would not be able to direct the Corporation to invest its reserves in a particular project or undertaking. He would certainly be able to direct that the reserves should be applied to equalising some of the cost of the products of the Corporation, because that would cover the point about the nation, but he would not be able under Clause 4 (1) to say, "I direct that £150,000 of the reserve of the company shall be invested in a guest house for the benefit of visiting officials of the Ministry of Supply at Pontypridd."

Mr. Mikardo: Would not the right hon. Gentleman agree that the effect of his Amendment would be to prevent the Minister from doing what he has just said it would be proper for the Minister to do, namely, to use the reserve fund to equalise out? The effect of the Amendment would be that the Minister could

say to the Corporation, "You must put this much into reserve," but would prevent him from saying to the Corporation, "You must take this out of reserve." Clearly he cannot use it as an equalisation fund unless he has powers to do both those things.

Mr. Lyttelton: The equalisation of prices is specifically provided for in the next part of the Clause.

Mr. Mikardo: That only says what is the purpose.

Mr. Lyttelton: I think it would be sufficient for the purpose which I think we have in common here if the Minister were to say, "In the national interest we consider that there are too violent fluctuations in the price structure of steel, and I give you directions under Clause 35 (3) that you must use your general reserve, if necessary, for securing stability." If the words in my Amendment were taken out, the Minister would be prevented from saying, "I think this or that security, quite outside the iron and steel industry, would be a suitable one in which to invest the reserves of the company." If I may suggest it with respect, the right hon. and learned Gentleman might clear up the point which I have not called in dispute but about which there is a difference of opinion between myself and the hon. Member for Nelson and Colne (Mr. Silverman).

The Solicitor-General: Undoubtedly with the words "or the application thereof" in paragraph (b) of this subsection the Minister could give a direction about the investment of a portion of the special reserve. Clause 4 gives him a power only to give general directions in matters which he thinks affect the national interest. The use of the words "affect the national interest" is for the purpose of describing the general directions he can give. Clause 4 (1) gives him only those general powers. Clause 4 (4) also gives him a power in relation to certain matters, to give specific directions, because that subsection extends the power given to him in subsection (1). If one looks at Clause 4, one finds, to begin with, that the Minister has a general power and in subsection (4) he is given, in addition, the power to give certain specific directions—for example, a direction to the Corporation to discontinue or restrict any of their activities.

Mr. Lyttelton: They are both negative.

The Solicitor-General: Yes, they are cast in a negative form, but the effect of a negative direction like that may have both negative and positive results. However, that is getting into a rather academic field of discussion.

Mr. Lyttelton: With respect, I do not think the Solicitor-General is quite representing what I mean. What we are talking about is the application of reserve funds to specific objects, and I suggest that he is not entitled to say that that matter is covered already by Clause 4 (1) because certain negative powers are added to the ones of a general nature which cover only the national interest. I hesitate to suggest it, but I think he has resolved the first part of this legal dispute in a most unexpected way by suggesting that I am right and the hon. Member for Nelson and Colne is wrong. I do not suppose it will happen again, but it has happened on this Amendment.

The Solicitor-General: I had only begun to say what I wanted to say when the right hon. Gentleman intervened. I was seeking to point the contrast between Clause 4 and the Clause we are discussing. I was saying that Clause 4 gives power to make two different kinds of directions, general and specific. When one comes to Clause 35, one finds a new power to give specific directions. I do not deny that for a moment. Of course, those directions can only be such as the Minister thinks are in the national interest; he is not given the power under this Measure to take any course which he thinks is contrary to the national interest. All the powers which he exercises under it, he exercises as trustee for the nation and in the national interest. It is a matter of controversy about whose view is right. Hon. Gentlemen opposite take one view and we take another.

Mr. Manningham-Buller: May I ask a question?

The Solicitor-General: May I complete this, because I shall never complete my argument if I do not at least make this point. The Minister is given a power by this paragraph to give specific directions which he thinks serve the national interest. To answer the question put by the right hon. Gentleman, as the paragraph

is now worded, those specific directions could certainly be to the effect that a portion of the fund shall be or shall not be invested in a specific way. They need not be limited to a direction that the total funds shall be applied in one way or another. For example, they can deal with a specific part of the fund.
It is a matter of principle and policy how far the Minister ought to give those directions and how far it would be wise and prudent to interfere with the judgment of those responsible for managing the Corporation, but that would have to be judged in relation to the actual circumstances existing at any given time. I say without reserve, however, that the power he takes is one which enables him to say, if he thinks it necessary to do so in the national interest, that a certain portion of the fund or the whole fund shall be invested in a specific way, or shall be changed from one investment to another, or shall not be invested at all in the way in which it was intended. That power he does take.
4.30 p.m.
If the Amendment were accepted, it would produce a curious, lopsided effect on the power which is given to the Minister, because he would still have power to give a specific direction. Under the earlier part of paragraph (b)—
…as to any matter relating to the establishment or management of the said reserve or the carrying of sums to the credit thereof"—
he could still give specific directions with regard to that; but when one came to the question of direction with regard to the application of it, he could not give one. That would be the result of the Amendment. We feel that the Minister must reserve to himself the power, in case of need or in case he thinks it necessary so to do, to give this sort of direction with regard to this very large pool of available reserve, which will be there to be used for national purposes in case it is required to do so. The national interest does require, so we thought in framing the Bill, that the Minister should reserve to himself that power in case of need. I repeat that whether and how he will exercise it, is a matter to be decided in relation to given circumstances at any given moment.
The question we are now considering is whether or not he ought to reserve


that power to himself. If he has power to give a specific direction, it is entirely illogical that that specific direction—that can extend, for example, to saying what is to be carried to the credit of the reserve fund, as the paragraph provides—shall not extend also to how the fund shall be invested or applied. For those reasons, we think that to cut out the words "or the application thereof" would make nonsense of the paragraph. If the Minister is to have specific powers at all, they certainly must par excellence extend to the question of investing this very substantial fund or any ascertainable portion of it. Therefore, I hope the House will agree that no case can be made in support of this Amendment.

Mr. Lyttelton: I am afraid I cannot agree with the right hon. and learned Gentleman. First of all, he said that the Clause would be lopsided if the Amendment were accepted. He sought to say that because the Minister is given specific powers relating to the establishment of a reserve, or the management of the said reserve, it automatically means that he must be given powers to invest it where he will. That arises from a profound misapprehension of what usually happens to reserves; that is not an uncommon error from the Treasury Bench. Reserves are not by any means always cash or investments which are outside the business. Far from making the Clause lopsided, the effect of the Amendment would be that, except for general directions which he would have to give in the national interest, the Minister would have to see that the reserve funds were invested in the businesses out of which they were originally made, and in no other businesses. In the exercise of the powers under Clause 4 (1), the reserve funds created would have to be re-invested in the businesses out of which they were originally made. That is not lopsided. It is what we call common or garden sense.
I will not follow the right hon. and learned Gentleman into a discussion of how "specific" can be described as being the same thing as "national." Of course, we all know that everything is for the best in the best of all possible Socialist worlds; and that nobody does anything unless he is quite certain it is in the public interest and, as a corollary, in the interest of the

Socialist Government. But when it is said that one power is to be exercised in the "national interest" and that another is a "specific" power to be exercised over the investment of a sum of money, then the word "specific" is used in contradistinction to the word "national," otherwise it is perfectly meaningless. When I say that I am going to do something locally or sectionally, I mean I am not going to do it nationally, cosmically or anything else, otherwise the words do not mean anything. I am afraid that we are not getting very far with the right hon. and learned Gentleman.

Mr. Mitchison: Some of the uneasiness, caused to hon. Gentlemen opposite by the phrase "the national interest" may well be due to the history of this industry, in which the national interest has not always been sufficiently considered. I am puzzled by the Amendment and I find it difficult to follow. Its object appears to be to prevent the Minister giving directions about the application of a general reserve, one of the objects of which is the financing of what I will call capital works.
I shall take one instance, which seems to be sufficient. Let us suppose that in the development of atomic research it may be practicable to use atomic power in setting up a large steelworks or some works that perform one of the operations in connection with iron and steel. That seems exactly a matter upon which it would be proper for the Minister to give directions as to the use of this reserve fund to finance that work; it does not seem to be a matter upon which the Corporation ought to be compelled to take a decision on its own, without the special knowledge and responsibility that attach to the Minister and the Government on that particular question. It is for that sort of reason that I should have thought it was necessary that the Minister should be able to give a specific direction as to the application of the reserve fund in financing capital work.
There is a second reason. I represent a place called Corby, where new iron and steel works have had, and are having, a very considerable social effect. It seems to me that one of the difficulties about iron and steel development in the past has been that those who were purely concerned with its business side did not have sufficient regard to the social consequences


of the changes they were making. That aspect will be more fully considered now that this industry is being taken under public ownership. When, however, it is a question of considering that aspect of the matter, it seems to me that the right person to do so is the Minister, and not the Corporation, particularly since the Minister is answerable to this House not only for the economic, but also for the social effects of the directions he may give as to applying this reserve fund, and for that type of reason. Whatever difficulty hon. Gentlemen opposite may find in understanding the meaning of the words "the national interest," I should have thought that they would at least have seen that it was in the national interest to give the Minister the power which they want to remove from him by the Amendment.

Viscount Hinchingbrooke: I should not have thought that the argument just adduced by the hon. and learned Member for Kettering (Mr. Mitchison) would appeal to certain members of his party, notably those on these benches below the Gangway, who take an interest in modern warfare. We now seem to be developing something of very great significance from this tiny phrase in paragraph (b) of Clause 35 (2), and it is a matter for consideration whether the right hon. Gentleman ought to introduce some new Clause in the Bill more specifically defining his powers over the Corporation.
The hon. and learned Member for Kettering says it might be quite proper for the Minister to give directions for the opening up of some new atomic development establishment and that the Minister would have recourse to this little phrase in this part of the Bill and would give the Corporation those instructions. If what is to be done is of that order, it seems that something mope substantial should be brought out about it in the Bill. There should be a new interpretation of Clause 4 and words added to Clause 4 and the words left out here, because this Clause deals with the more or less simple matter of how the Corporation are to use their reserve fund, particularly that part of the reserve fund which is not invested in the business of iron and steel. In a moment we shall be considering the ordinary

powers of investment of money temporarily in the hands of the Corporation.
I do not think the Government are intending to make use of this phrase to oblige the Corporation to disinvest anything of its substantial iron and steel holdings to carry out the special applications of this reserve fund. If they are, they ought to indicate that to the House. We can take the view that a dispute will arise between the Government and the Corporation in the matter of the application of these reserves. For example, there might be a Minister of Supply who is an absolute zealot in the establishment of the social welfare State, more than general public feeling and even the feeling of his own Government. He might say to the Corporation, "Disinvest your temporary reserves and build rest homes for the ageing parents of steel workers all over the country." The Corporation might reply, "This is not a policy we can carry out at this stage. We are about to enter a tremendous competition with the iron and steel producing firms of the United States, Belgium, Luxembourg and France. For the next five or 10 years, our steel workers must rest content with the homes they have, and their parents must also be content."
That is the kind of dispute that may arise between the Minister and the Corporation. I cannot imagine it in the case suggested by the hon. and learned Member for Kettering, because we might all assume that atomic development work may be in the national interest, in the view of the Government and of all the people of the country, except the hon. Member for South Ayrshire (Mr. Emrys Hughes), who I see has just entered the Chamber. But the development of iron and steel in the way in which I have suggested a zealot for the Socialist welfare State might desire it, would not be in the national interest.

Mr. S. Silverman: In the hypothetical case put by the noble Lord of a difference of opinion between the Minister and the Corporation as to whether the time had come and whether the reserve was large enough for such a purpose, is the noble Lord saying that the Corporation, without direction, is a better judge of such a question than the Minister, who is answerable to the House of Commons?

Viscount Hinchingbrooke: I do not know who would judge; that is the difficulty. The Corporation ought to be primarily concerned with its economic circumstances and economic future and the Minister of Supply, assuming he had the character I have given him, might say that it was in the national interest to press on with the provision of social capital for the industrial workers. A dispute would arise and I do not know who should decide. I see it arising under this phrase and I think the right hon. Gentleman ought to look again at Clause 4 and see whether it would be better to elaborate it and leave out the words of which we complain here.

4.45 p.m.

Mr. Mikardo: The noble Lord the Member for South Dorset (Viscount Hinchingbrooke) has followed the right hon. Member for Aldershot (Mr. Lyttelton) into what seems to me to be a complete misconception of what would be the effect of this Amendment if it were carried. Having listened very closely to all the arguments, I am quite sure that the Amendment would have the precisely opposite effect from that which the right hon. Gentleman says he wants done and, conversely, the things he wants done are already safeguarded in the wording of the Clause as it stands. May I draw the attention of the right hon. Gentleman and the noble Lord to the effect of subsection (3)? They both spoke of the danger of the dissipation of the Corporation's reserves, or, at least, of the expenditure of those reserves, outside the steel industry. The right hon. Gentleman talked about the investment in other businesses or industries and the noble Lord spoke of their investment for what he described as social purposes.
Subsection (3), whilst it does not say what shall be done and what shall not be done—it is subsection (2) which does that—describes the two purposes for which the reserves are set up. One is the checking of undue fluctuation in the price of products of the Corporation and the other is the financing of capital works. On both sides of the House we are agreed that these are proper purposes for which the reserves can be used and no one would have any objection to the Corporation, with or without direction, using them for those purposes.

Mr. Lyttelton: I agree that those purposes are included, but, perhaps the hon. Member will address himself to the sort of thing I am trying to prevent—when there is a surplus of steel the Minister of Supply might buy shipbuilding companies to get rid of surplus steel and be driven further and further into other industries.

Mr. Mikardo: The right hon. Gentleman's intervention shows that we are united on purposes, but there are differences of interpretation. Investment in companies outside the Corporation's normal activities is covered, not in Clause 35, but in Clause 36. The right hon. Gentleman will observe that the Minister has no specific powers of direction there. The fact that the subject of Clause 36. has been taken out and made a separate Clause, away from Clause 35, which describes the Minister's powers of direction, ought to satisfy the right hon. Gentleman. It ensures, as he and the noble Lord appear to want to ensure, that, so far as that type of investment is concerned, it shall be at the discretion of the Corporation themselves. Reinforcing the separation out of that subject into Clause 36 is paragraph (a) of subsection (2) of this Clause, where the quite complete, comprehensive and explicit proviso is laid down that
no part of the said reserve shall be applied otherwise than for the purposes of the Corporation or of publicly-owned companies.
When the right hon. Gentleman says that the purpose of the Amendment is to ensure that the reserves of the Corporation are not invested in all sorts of irrelevant projects of one sort and another I am sure he is overlooking the combined effect of paragraph (a) subsection (2) and the purposes which are set out, even with the reserve he instanced, in subsection (3) and the separation out from Clause 35 and putting into a separate Clause away from the Minister's powers of direction. The combination of those three safeguards us against the dangers the right hon. Gentleman has in mind.

Mr. Selwyn Lloyd: I am seeking to follow the hon. Member's argument. I appreciate his argument in relation to Clause 36. He will recollect that the Government introduced an Amendment to Clause 2 with regard to the acquisition of other companies. Surely it would


be perfectly possible for the Minister to give a specific direction under Clause 35 for part of the reserve funds to be used to acquire one of the companies referred to in the new Clause 2. The hon. Member will recollect that such a company could be acquired for any purpose authorised by its memorandum of association.

Mr. Mikardo: With deference, I should have thought that such a direction as the one which the hon. and learned Member describes would expressly violate the provisions of Clause 36, which clearly says that the Corporation shall not have power under that Clause, which deals with the investment of the reserves of the Corporation, to invest its reserves in the securities of any company so as to make that company a subsidiary of the Corporation. I should have thought that what the hon. and learned Member envisaged would cut across Clause 36. I am trying to describe why I think that the purposes which the right hon. Gentleman says he seeks by this Amendment are already fulfilled in the wording of the Clause as it stands.
I now wish to try to show that if the Amendment were carried, the purposes which the right hon. Gentleman agrees are proper for the investment of the reserves, could not be carried out. When I intervened in the course of the right hon. Gentleman's speech to point out what I thought would be the effect of the omission of the words which he seeks to delete, he referred me to subsection (3). That subsection, as I have already pointed out, is a statement of purpose or intention, and it does not say what can or cannot be done. If one re-reads Clause 35 (2 b) without the words "or the application thereof" that paragraph then seems to me to say that the Minister can say to the Corporation, "You must put this money into reserve," but he cannot say to the Corporation at any time, "You must take this money out of reserve for this purpose."
I should like to quote a possible example, that of my right hon. and learned Friend. The Minister might say to the Corporation, "The developments in atomic energy are now getting to the stage when for the next five years you ought to put aside annually £2 million, because in 1958 you will probably be

spending £10 million on an atomic energy power plant." The Minister could say that to the Corporation, but under subsection (2, b), amended as the right hon. Gentleman proposes, when 1958 arrived and the £10 million was then in reserve for the purpose of buying an atomic power plant, the Corporation could say, "We do not choose to spend it in that way," and the Minister could not direct them to spend it in that way. The ridiculous position would therefore arise that although money had been put into reserve for a certain purpose by agreement between the Minister and the Corporation, the Minister would have no power to ensure that that reserve was spent for that purpose.

Mr. Selwyn Lloyd: Surely, under Clause 4 (1) the Minister has the clearest possible power to give a direction covering that case?

Mr. Mikardo: Then we get back to the question of what is general and what is specific. I should have thought that a direction specifically to set up an atomic energy power plant was a specific direction, and was excepted from Clause 4; indeed it was so excepted in the terms of the intervention of the right hon. Member for Aldershot, who pointed out, quite rightly, that the only specific powers in Clause 4 are negative and not positive powers. Therefore, under Clause 4, the Minister would not have power to give a specific direction that money should be withdrawn from the reserve for expenditure on the purpose for which it had been put to reserve.
If subsection (2, b) were amended as proposed by this Amendment, the Minister would not have any other power to give that direction, nor would he have power to give the Corporation a direction to take out money for the purpose of equalising prices, another purpose which the right hon. Member for Aldershot agrees is a proper purpose for the reserve. Thus the ridiculous position would arise, if this Amendment were carried, that the Minister would be able to say to the Corporation, "You are to put aside, in 1949, a sum of 10s. out of every ton of steel you sell for the equalisation of prices," but when 1950 came he would not be able to say, "You can now take that 10s. out in order to do that equalising." He would have power to tell them


to put the money to reserve but never to tell them to take it out of reserve. I am sure that that ridiculous result is not what the right hon. Gentleman wants, and if he agrees that that would he the effect of his Amendment, I think that he himself would wish to withdraw it.

Mr. Hugh Fraser: The first part of the hon. Member's case was devoted to quoting Clause 36 and to showing that, under it, the object which my right hon. Friend was endeavouring to maintain was safeguarded. But Clause 36 applies only to cash in hand, so to speak; it does not apply to the general reserve, which is the question under discussion. The hon. Member's second point was that the matter was safeguarded again by subsection (2, b) and the powers of the Minister to direct specific spending. Surely, under subsection (2) it is the Corporation which may determine how the spending is carried out. The general point which emerges is surely whether it is desirable that the Minister should interfere with the Corporation, which is now reduced more or less to the status of a holding company, with specific directions on the actual expenditure of that holding company on capital investment. The question at issue is whether that is right or not.
Surely the speech made by the hon. and learned Member for Kettering (Mr. Mitchison) was hardly a good recruiting speech for members of the Corporation, who, we are told, are waiting, so to speak, in the Minister's anteroom, ready to rush in and join the Board. They will be very discouraged to hear that the Minister is to have the power to butt in every time they decide to spend any money. We believe that this matter of the Minister's intervention as to how reserves should be spent should be relegated to a much higher level than the specific intervention which is permitted as the Clause stands.

Mr. Mitchison: If I may correct the hon. Member, I did not say what he attributes to me.

Mr. Fraser: I did not attribute anything to the hon. and learned Member except the general sentiment which was the impression which the House received.
The other point which the Solicitor-General, when he made his gracious

speech, seemed to omit was that Clause 4, subsection (4), states:
Provided that—
(i) the Minister shall not give any direction under this subsection unless he is satisfied that it can be given effect to without prejudice to the proper discharge to the duties of the Corporation under this Act;…
Surely it has always been rather difficult to find out what the proper discharge of the duties of the Corporation under this Bill actually is, because we first thought that the Corporation were to be an operating company; it now seems that they are to be a holding company. Surely one of the chief objectives and uses of a holding company is to see how its investment is made.
5.0 p.m.
It is on this question of how investment should be made that the Minister by this Clause, is overstepping the line which he should take with respect to the Corporation. I know it can be argued that there can be too little interference with the running of the Corporation, and there certainly can be too much interference. I believe that if this Amendment is accepted it will do something to right that balance. The balance is that the Minister should be able to interfere with the Corporation or the holding company on matters of general policy but not on matters of specific detail which this Clause gives him the power to do. I hope that the Minister will give this matter further and very serious consideration.

Mr. Selwyn Lloyd: I hope someone on the Government Front Bench will say something on this matter. I do not wish to come between them and the House. I only want to ask a simple question, and it arises out of what was said by the hon. Member for Reading (Mr. Mikardo). He gave me a categorical assurance that, in his view, it would be impossible for the Minister to direct the Corporation to use part of the general reserve in order to acquire interests in any company under the new Clause 2. My mind would be substantially relieved if that opinion of the hon. Member could be fortified by the Minister or one of his supporters.

Question put, "That the words proposed to be left out stand part of the Bill."

The House divided: Ayes, 269; Noes, 154.

Division No. 121.]
AYES
[5.2 p.m.


Albu, A. H.
Greenwood, A. W. J. (Haywood)
Moyle, A.


Allen, A. C. (Bosworth)
Grenfell, D. R
Murray, J. D.


Alpass, J. H.
Grey C. F.
Naylor, T. E.


Anderson, A. (Motherwell)
Grierson, E.
Neal, H. (Claycross)


Anderson, F. (Whitehaven)
Griffiths, D. (Rother Valley)
Nichol, Mrs. M. E. (Bradford, N.)


Attewell, H. C.
Griffiths, W. D. (Moss Side)
Nicholls, H. R. (Stratford)


Austin, H. Lewis
Guest, Dr L. Haden
Noel-Baker, Capt. F E. (Brentford)


Awbery, S. S
Gunter, R. J
Oldfield, W. H


Ayles, W. H.
Hale, Leslie
Oliver, G. H


Ayrton Gould, Mrs. [...]
Hall, Rt. Hon. Glenvil
Orbach, M.


Bacon, Miss A.
Hamilton, Lieut.-Col. R
Paling, Will T. (Dewsbury)


Balfour, A.
Hannan, W. (Maryhill)
Palmer, A. M. F


Barnes, Rt. Hon. A. J.
Hardman, D. R.
Parker, J.


Barstow, P. G.
Hardy, E. A.
Parkin, B. T.


Barton, C.
Harrison, J.
Paton, Mrs. F. (Rushcliffe)


Battley, J. R.
Haworth, J.
Paton, J. (Norwich)


Bechervaise, A. E
Henderson, Rt. Hon. A. (Kingswinford)
Pearson, A.


Beswick, F.
Hicks, G.
Part, T. F


Bing, G. H. C
Holman, P.
Perrins, W.


Binns, J.
Holmes, H. E. (Hemsworth)
Piratin, P.


Blackburn, A. R.
Horabin, T. L.
Popplewell, E.


Blenkinsop, A.
Houghton, A L N. D
Porter, E. (Warrington)


Boardman, H.
Hoy, J.
Porter, G. (Leeds)


Bowden, Flg. Offr. H. W.
Hubbard, T.
Price, M. Philips


Braddock, Mrs. E. M. (L'pl. Exch'ge)
Hudson, J. H. (Ealing, W.)
Proctor, W. T.


Braddock, T. (Mitcham)
Hughes, Emrys (S. Ayr)
Pryde, D. J.


Bramall, E. A.
Hughes, H. D. (W'lverh'pton, W)
Pursey, Comdr. H


Brook, D. (Halifax)
Hynd, H. (Hackney, C.)
Randall, H. E.


Brooks, T. J. (Rothwell)
Hynd, J. B. (Attercliffe)
Ranger, J.


Broughton, Dr. A. D. D.
Irvine, A. J. (Liverpool)
Rees-Williams, D R


Brown, George (Belper)
Irving, W. J. (Tottenham, N.)
Reeves, J.


Brown, T. J. (Ince)
Janner, B.
Reid, T. (Swindon)


Bruce, Maj. D. W. T.
Jeger, Dr. S. W (St. Pancras, S. E.)
Rhodes, H.


Burke, W. A.
John, W.
Ridealgh, Mrs. M.


Carmichael, James
Johnston, Douglas
Roberts, Goronwy (Caernarvonshire)


Chamberlain, R. A.
Jones, D. T. (Hartlepool)
Robinson, K. (St. Pancras)


Chetwynd, G. R.
Jones, Jack (Bolton)
Rogers, G. H. R.


Cluse, W. S.
Kenyon, C.
Ross, William (Kilmarnock)


Cocks, F. S.
Key, Rt. Hon. C. W.
Royle, C.


Collindridge, F.
Kinghorn, Sqn.-Ldr E
Scollan, T.


Collins, V. J.
Kinley, J.
Scott-Elliot, W.


Colman, Miss G. M.
Kirby, B V.
Shackleton, E. A A


Comyns, Dr. L.
Kirkwood, Rt. Hon. D
Sharp, Granville


Corlett, Dr. J.
Lang, G.
Shinwell, Rt. Hon E.


Cove, W. G.
Lawson, Rt. Hon. J. J
Shurmer, P.


Crawley, A.
Leonard, W.
Silverman, J. (Erdington)


Crossman, R. H. S
Leslie, J. R.
Silverman, S. S. (Nelson)


Cullen, Mrs.
Levy, B. W.
Simmons, C. J.


Daggar G.
Lewis, A. W. J. (Upton)
Skeffington, A. M


Davies, Edward (Burslem)
Lewis, J. (Bolton)
Skeffington-Lodge, T C


Davies, Harold (Leek)
Lewis, T. (Southampton)
Skinnard, F. W.


Davies, R. J.(Westhoughton)
Lipton, Lt.-Col. M.
Smith, Ellis (stoke)


Davies, S. O. (Merthyr)
Logan, D. G.
Smith, H. N. (Nottingham, S.)


Deer, G.
Lyne, A. W.
Smith,, S. H (Hull, S.W.)


de Freitas, Geoffrey
McAdam, W.
Snow, J. W.


Delargy, H. J.
McAllister, G.
Solley, L. J.


Diamond, J.
McEntee, V. La T
Sorensen, R. W


Dobbie, W.
McGhee, H G
Soskice, Rt. Hon. Sir Frank


Dodds, N. N.
Mack, J. D.
Sparks, J A


Driberg, T. E. N.
McKay, J. (Wallsend)
Steele, T.


Dugdale, J. (W. Bromwich)
Mackay, R. W. G. (Hull, N.W.)
Stewart, Michael (Fulham, E.)


Ede, Rt. Hon. J. C.
McKinlay, A. S.
Strauss, Rt. Hon. G R. (Lambeth)


Edwards, Rt. Hon. Sir C. (Bedwellty)
McLeavy, F.
Stross, Dr. B.


Edwards, John (Blackburn)
MacPherson, Malcolm (Stirling)
Stubbs, A. E


Edwards, W. J. (Whitechapel)
Mainwaring, W. H.
Swingler, S.


Evans, Albert (Islington, W.)
Mallalieu, E. L. (Brigg)
Sylvester, G. O


Evans, E. (Lowestoft)
Mallalieu, J. P. W. (Huddersfield)
Symonds, A. L.


Evans, John (Ogmore)
Mann, Mrs. J.
Taylor, H. B. (Mansfield)


Evans, S. N. (Wednesbury)
Manning, C. (Camberwell, N.)
Taylor, R. J. (Morpeth)


Fairhurst, F.
Manning, Mrs. L. (Epping)
Thomas, D. E. (Aberdare)


Farthing, W. J.
Mathers, Rt. Hon. George
Thomas, George (Cardiff)


Field, Capt. W J.
Medland, H. M.
Thomas, I. O. (Wrekin)


Follick, M.
Mellish, R. J.
Thurtle, Ernest


Foot, M. M
Messer, F.
Timmons, J.


Forman, J. C.
Middleton, Mrs. L.
Usborne, Henry


Fraser, T. (Hamilton)
Mikardo, Ian
Vernon, Maj. W. F


Freeman, peter (Newport)
Mitchison, G. R
Viant, S. P.


Gallacher, W.
Monslow, W.
Walker, G. H.


Ganley, Mrs. C. S
Moody, A. S.
Wallace, G. D. (Chislehurst)


Gibbins, J.
Morgan, Dr. H. B.
Wallace, H. W. (Walthamstow, E.)


Gilzean, A.
Morris, P. (Swansea, W.)
Warbey, W. N.


Glanville, J. E. (Consett)
Morrison, Rt. Hn. H. (Lewisham, E.)
Webb, M. (Bradford, C.)


Gooch, E. G.
Mort, D. L.
Weitzman, D







Wells, P. L. (Faversham)
Willey, O. G. (Cleveland)
Wise, Major F. J.


Wells, W. T. (Walsall)
Williams, D. J. (Neath)
Woodburn, Rt. Hon. A


West, D. G.
Williams, J. L. (Kelvingrove)
Wyatt, W.


Wheatley, Rt. Hn. J. T. (Edinb'gh, E.)
Williams, Ronald (Wigan)
Yates, V. F


White, H. (Derbyshire, N. E.)
Williams, W. T. (Hammersmith, S.)



Whiteley, Rt. Hon. W.
Williams, W. R. (Heston)
TELLERS FOR THE AYES:


Wigg, George
Willis, E.
Mr. Joseph Henderson and


Wilkins, W. A
Wilson, Rt. Hon. J. H.
Mr. Richard Adams.




NOES


Agnew, Cmdr. P. G.
Hare, Hon. J. H. (Woodbridge)
O'Neill, Rt. Hon Sir H


Amory, D. Heathcoat
Harvey, Air-Comdre. A. V.
Peake, Rt. Hon. O.


Assheton, Rt. Hon. R.
Haughton, S. G
Peto, Brig. C. H. M


Astor, Hon. M.
Head, Brig. A. H.
Pickthorn, K.


Baldwin, A. E
Headlam, Lieut.-Col. Rt. Hon Sir C
Ponsonby, Col. C. E.


Barlow, Sir J.
Henderson, John (Cathcart)
Poole, O. B. S (Oswestry)


Beamish, Maj. T. V. H
Hinchingbrooke, Viscount
Price-White, Lt.-Col. D


Beechman, N. A
Hogg, Hon. Q.
Prior-Palmer, Brig. O


Bennett, Sir P
Hollis, M. C.
Raikes, H. V.


Birch, Nigel
Holmes, Sir J. Stanley (Harwick)
Ramsay, Maj. S


Boothby, R.
Hope, Lord J.
Rayner, Brig, R.


Bossom, A. C.
Howard, Hon. A
Reed, Sir S. (Aylesbury)


Bower, N.
Hudson, Rt. Hon. R. S. (Southport)
Roberts, H. (Handswotth)


Boyd-Carpenter, J. A.
Hurd, A.
Roberts, W. (Cumberland, N.)


Braithwaite, Lt.-Comdr. J. G
Hutchison, Lt.-Cm. Clark (E'b'rgh W.)
Robinson, Roland (Blackpool, S.)


Buchan-Hepburn, P. G. T.
Hutchison, Col. J. R. (Glasgow, C.)
Ropner, Col. L.


Bullock, Capt. M.
Jeffreys, General Sir G.
Ross, Sir R. D. (Londonderry)


Butcher, H. W.
Keeling, E. H.
Scott, Lord W


Butler, Rt. Hn. R. A. (S'ffr'n W'ld'n)
Kerr, Sir J. Graham
Shepherd, S. (Newark)


Carson, E
Kingsmill, Lt.-Col. W. H
Smiles, Lt.-Col. Sir W.


Challen, C.
Lambert, Hon. G.
Smith, E. P. (Ashford)


Clarke, Col. R. S.
Lancaster, Col. C. G
Smithers, Sir W


Clifton-Brown, Lt.-Col. G.
Legge-Bourke, Maj. E. A. H.
Snadden, W. M


Crosthwaite-Eyre, Col. O. E.
Lennox-Boyd, A. T.
Spearman, A. C. M.


Crowder, Capt. John E.
Lindsay, M. (Solihull)
Stanley, Rt. Hon. O.


Cuthbert, W. N.
Lipson, D. L.
Stoddart Scott, Col. M


Darling, Sir W. Y.
Lloyd, Selwyn (Wirral)
Strauss, Henry (English Universities)


Davidson, Viscountess
Low, A. R. W.
Stuart, Rt Hon. J. (Moray)


De la Bere, R.
Lucas-Tooth, S. H.
Studholme, H. G.


Digby, Simon Wingfield
Lyttelton, Rt. Hon. O
Sutcliffe, H.


Dodds-Parker, A. D
MacAndrew, Col. Sir C
Taylor, C. S. (Eastbourne)


Donner, P. W
McCallum, Maj. D.
Taylor, Vice-Adm. E. A. (P'dd't'n, S.)


Dower, Col A. V. G. (Penrith)
McFarlane, C. S.
Thomas, Ivor (Keighley)


Drewe, C.
Mackeson, Brig. H. R.
Thorneycroft, G. E. P. (Monmouth)


Dugdale, Maj. Sir T. (Richmond)
McKie, J. H. (Galloway)
Thornton-Kemsley, C. N.


Eccles, D. M.
Maclay, Hon. J. S
Thorp, Brigadier R. A F


Eden, Rt. Hon. A.
MacLeod, J.
Touche, G. C.


Elliot, Lieut.-Col. Rt. Hon Walter
Macmillan, Rt. Hon. Harold (Bromley)
Turton, R. H.


Fleming, Sqn.-Ldr. E. L
Maitland, Comdr. J. W.
Tweedsmuir, Lady


Fletcher, W. (Bury)
Manningham-Buller, R. E
Vane, W. M. F


Fox, Sir G
Marlowe, A. A. H.
Wadsworth, G.


Fraser, H. C. P. (Stone)
Marshall, D. (Bodmin)
Ward, Hon G. R.


Fraser, Sir I. (Lonsdale)
Mellor, Sir J.
Wheatley, Colonel M. J. (Dorset, E.)


Fyfe, Rt. Hon. Sir D. P. M.
Morris, Hopkin (Carmarthen)
White, Sir D. (Fareham)


Galbraith, Cmdr. T. D. (Pollok)
Morrison, Maj. J. G. (Salisbury)
White, J. B. (Canterbury)


Galbraith, T. G. D. (Hillhead)
Morrison, Rt. Hn. W. S. (Cirencester)
Williams, Gerald (Tonbridge)


Gammans, L. D.
Mott-Radclytffe, C. E.
Willoughby de Eresby, Lord


Gates, Maj. E. E.
Mullan, Lt. C H.
York, C.


Glyn, Sir R.
Neven-Spence, Sir B
Young, Sir A. S. L. (Partick)


Gomme-Duncan, Col. A
Nicholson, G.



Gridley, Sir A.
Noble, Comdr A. H. P
TELLERS FOR THE NOES:


Grimston, R. V.
Nutting, Anthony
Major Conant and


Hannon Sir P. (Moseley)
Odey, G. W
Lieut.-Colonel Bromley-Davenport

Clause 36.—(ORDINARY POWERS OF INVESTMENT)

Mr. Selwyn Lloyd: I beg to move, in page 41, line 17, after "Corporation." to insert:
or any publicly-owned company.
I suggest it would be for the convenience of the House if we were also to discuss the Amendments in lines 19, 21, 23 and 24, all of which are consequential. At long last we have reached an Amendment which I think the right hon. Gentle-

man will be prepared to accept. So far, he has not given way on a single point, and I do not think he has given a single undertaking to look at any matter again. I have logic and tidiness in support of this Amendment, and on this I think that the views of the Government and the Opposition can march together.
Clause 36 deals with the ordinary powers of investment of the Corporation. It says:
Any sums in the hands of the Corporation which are not immediately required for the


purposes of their business may be invested in such manner as the Corporation think proper.
The Government have then seen fit to include this proviso:
Provided that the Corporation shall not have power under this section to invest money in the securities of any company so as to make that company a subsidiary of the Corporation or so as to enable the Corporation to exercise an effective influence on the policy of the company.
I gather that on this issue the Government are being sufficiently straightforward to say that, if it is the intention to acquire a controlling interest or domination over a particular company, it will be done in some other way, and that they will not use the back-door method of investment of the surplus funds of the Corporation for such a purpose. As the Clause stands, the only body which is prevented from using that method is the Corporation. It would be possible for one of the Corporation's subsidiaries to use its reserves or in some other way to obtain control over another company. I imagine, therefore, that the safeguard the Government intend to provide is wholly illusory.
5.15 p.m.
We desire that the Clause should read:
Any sums in the hands of the Corporation or any publicly-owned company which are not immediately required for the purposes of their business may be invested in such manner as the Corporation or the publicly-owned company, as the case may be, think proper:
Provided that neither the Corporation nor any publicly-owned company shall have power under this section to invest money in the securities of any company so as to make that company a subsidiary of the Corporation or of any publicly-owned company so as to enable the Corporation or any publicly-owned company to exercise an effective influence on the policy of the company.
I would remind the House that the word "subsidiary" is defined in the definition Clause in accordance with Section 154 of the Companies Act, 1948. A company can become a subsidiary of another if that other company is either a member of the board or controls the composition of the board, or holds more than half the nominal value of the equity share capital. I urge the Government at long last to concede something to the Opposition. If they do not make this concession, then, like so many other things, this safeguard is only a sham.

Colonel Lancaster: I beg to second the Amendment.
My hon. and learned Friend the Member for Wirral (Mr. Selwyn Lloyd) has covered the point very effectively. He has provided the Minister with an opportunity to insert something into the Bill to give the Minister a safeguard which I am sure he wishes to have. It is surely intended in this Clause to debar the Corporation from exercising powers in regard to any sums of money they may have at a particular moment to obtain control of a company. Surely it is also the wish that these powers should apply to any of their subsidiaries. Unless the Minister can give a good reason why these words should not be inserted, I cannot but agree with my hon. and learned Friend that he is proposing something which tidies up the Bill and which the Government would wish to have inserted at this point.

Colonel J. R. H. Hutchison: I wish briefly to support this Amendment. If it has been found desirable that sums in the hands of the Corporation should be treated in this way under the Clause and that the Corporation should have powers to be able to invest such sums, surely it is equally clear and desirable that the publicly-owned companies should also have the same powers.

The Minister of Supply (Mr. G. R. Strauss): I have no quarrel with the general purpose of this Amendment, but I have a very good reason to suggest why it is undesirable. It is our intention that control of the finances of the various companies should rest with the Corporation. The public companies should not be able to decide for themselves where and how they are to invest their surplus funds. There must be central control of those surplus funds and of investment. The Amendment would deliberately give power to the publicly-owned companies to invest how they liked, with a specific exception. I am sure that we do not want that to happen.
It is desirable, in a big organisation of this kind, that there should be central administration of investment of surplus funds. I agree that there should not be investment of any funds where they happen to be in the hands of the Corporation or of the wholly owned company along the lines we are discussing, but it must be the responsibility of the Corporation to see that does not happen. If we accepted the Amendment it would


give to the publicly-owned companies power to invest surplus funds which, in our view, they should not have, and for that reason perhaps the hon. and learned Member for Wirral (Mr. Selwyn Lloyd) will withdraw the Amendment.

Mr. Osbert Peake: I quite see the point which the right hon. Gentleman has made, but as we are discussing several Amendments at the same time would not the best course to adopt be for the right hon. Gentleman to say that he cannot accept the insertion of the words "publicly-owned company" after "Corporation" in line 17 or line 19 but that the words "publicly-owned company" should be added to the proviso which prohibits the Corporation from investing money in such a way as to make other companies subsidiaries of the Corporation, or so as to enable the Corporation to exercise an effective influence on the policy of the company. It would seem to be completely in accord with what the right hon. Gentleman has said is his intention about central control of finance by the Corporation to allow the first four lines of the Clause to stand as drafted, without the addition of the words "publicly-owned company" but to go on, in the proviso, to place an embargo not only on the Corporation investing its funds in such a way as to bring other concerns within its effective control, but also an embargo upon any publicly-owned company investing its money in such a way as to make other companies subsidiaries of it, or to give it an effective influence on the policy of those other companies.
If we did that we should be carrying out what the Minister has in mind and be putting into the statute something which makes it clear that the investments of these publicly-owned companies will be dealt with centrally by the Corporation and not piecemeal by the companies themselves. If my hon. and learned Friend the Member for Wirral will withdraw the Amendment perhaps the Minister might see his way, on the third Amendment, to accept my hon. and learned Friend's suggestion.

Mr. G. R. Strauss: With the leave of the House, may I say that we have looked at this matter but have found that in practice, and legally, it will not work. It would by implication give power to the

publicly-owned companies to invest for other purposes, and we do not want to give specific powers to the boards of these companies. There is no difference of intention between us, but we cannot meet the situation by accepting a subsequent Amendment.

Colonel Hutchison: Is not the constitution such that the Corporation will, as things stand, have control of the finances of the publicly-owned companies?

Mr. Strauss: They will have control by virtue of the fact that they are the sole shareholders.

Viscount Hinchingbrooke: Is that good enough? They are the sole shareholders, but ought not the Minister to insert words in the Bill which will regulate the position and show that the Corporation have powers of overall investment of the capital of the whole of these publicly-owned companies? If he will not do that then we are back to the flexibility regime. If he agrees with the general intention of the remarks of my right hon. Friend the Member for North Leeds (Mr. Peake), that the tightening up should apply to the publicly-owned companies, will he leave the first part of the Clause so that the Corporation shall have overall powers of investment? We ask the Minister to be specific in the Bill and he refuses, although he gives no adequate reason except to say that the Corporation, by virtue of its holding all the shares of these publicly-owned companies, automatically has that power. Between now and the next stage of the Bill—it might be done in Clause 2, which defines the powers of the Corporation—the right hon. Gentleman should make it clear that the Corporation should have this overriding right of investment planning.

Mr. Selwyn Lloyd: The right hon. Gentleman has met this Amendment in a much more conciliatory spirit than he has met many others, and although I am anxious not to be obstinate there are certain difficulties about what he suggested. There must be sums of money in the hands of the companies as well as in the hands of the Corporation. There must be power, somewhere, to invest those sums of money. At the moment, the Clause does not appear to cover sums of money in the hands of the companies and which are to be invested. They will be invested in accordance with their


articles of association. They can be invested without any restriction at all.
I understand that the Minister wishes to put a proviso into the Bill about the investment of the moneys of publicly-owned companies. Supposing a situation is reached when there is no exact accord between the Corporation and the Minister, it will be possible for the Corporation to get round this proviso by using the surplus funds of some of the companies to branch out in undertakings which, technically, will be ruled out under this Clause if the Corporation seek to do it with their own funds. It is to cover that contingency that some words are required in the Bill. If the right hon. Gentleman will look at the matter again before the Bill reaches another place, I should ask leave to withdraw the Amendment.

Mr. G. R. Strauss: I have already said that we are not quarrelling on this matter. It is our intention that no moneys held either by the publicly-owned companies or the Corporation should be used for this purpose. The point is covered by the fact that the Corporation is the sole shareholder and can give a general direction to all its companies. If necessary, the Minister can give a direction to the Corporation if it did not do so. Therefore, I am not worried about the situation. I am perfectly happy to look at the matter again and to consider whether it is necessary to give an opportunity in another place to insert some words to cover it. But even if we cannot, I do not think that we need fear that anything is likely to go wrong.

5.30 p.m.

Mr. Attewell: One of the firms within the Third Schedule may be engaged in, shall we say, the manufacture of some article in competition with other firms outside the Third Schedule. In the day-to-day working of that particular firm in the Third Schedule they might find, with the concurrence of another firm manufacturing those articles, that it would be wise for that other firm to come into the management of the main firm. As I see it at the moment, it is possible for a firm in the Third Schedule, by agreement with another firm, to take over, by investment of money, the shares of this other firm. If something is inserted into this Bill which will prevent

any firm which is in the Third Schedule from engaging in, shall we say, the hotel business, we should be preventing that Third Schedule company from performing its activities in its best interests; and we shall leave a firm outside which is willing to come into the management of the Third Schedule company. I am wondering what the Minister's case would be in regard to that?

The Solicitor-General: I think my hon. Friend's point can be met by Clause 2, because Clause 36 only deals with money not immediately required for the purpose of their business. Under Clause 2 there is specific power to acquire companies by an agreement of the kind which he has described.

Mr. Selwyn Lloyd: In view of the intimation of the right hon. Gentleman I beg to ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Viscount Hinchingbrooke: I beg to move, in page 41, line 20, at the end, to insert:
in any statutory security (as defined for the purposes of the Seventh Schedule to this Act).
That would make the Clause read:
Any sums in the hands of the Corporation which are not immediately required for the purposes of their business may be invested in such manner as the Corporation think proper in any statutory security (as defined for the purposes of the Seventh Schedule to this Act).
In the proviso the Corporation are not to have the power to exercise any effective influence on the policy of the company in whom they invest their temporary moneys. We on this side of the House consider that to be an inadequate safeguard. If some authority like the Corporation were to invest in the shares of a company with sums equal to about 20 per cent. or 25 per cent. of the total shareholding, that might not be regarded legally as making them a subsidiary. They would need 51 per cent. of the shares for that. But they would have a very remarkable influence on the board, not only by virtue of the 25 per cent. holding, but by virtue of whom they are and with what authority they act.
It seems to us that there is still a loophole in the proviso to exercise an influence on a subsidiary of the Corporation, which influence is really not


intended to be there by virtue of the wording which the right hon. Gentleman himself has put in. Therefore, in order to make the position absolutely sure, we wish to add that the investment must be in any statutory security. That is defined in the Seventh Schedule as meaning—I will not go into the whole thing—trustee stocks. We say therefore that the temporary moneys of the Corporation shall be invested in that way. They could at no stage be assumed to have any real control of the operations of the subsidiary company, but would be confined to those stocks and debentures and other things of that kind. That would effectively employ their money for the purposes of receiving revenue thereon. It would be on hand, on easy call, and could be re-invested at any other stage in whatever the ultimate investment was to be.

Sir John Barlow: I beg to second the Amendment.
It seems to me that as the Clause stands at present it is far too wide. Presumably the Minister, and probably the whole House, assumed that funds which are unnecessary for the working of the Corporation for the time being will be invested in the way suggested by the proposal in this Amendment; but as the Clause remains at present it is far too wide, and the House would be much happier if it were laid down definitely that these funds should be invested in this way. Then we should know exactly where we were.

Mr. G. R. Strauss: The Government cannot accept this Amendment. This is another of the Amendments which have been moved during the various stages of the Committee, and the Report stage, to restrict the Corporation and handicap it in a way in which no commercial concern is handicapped. It is suggested here that their surplus funds can, broadly speaking, be invested only in trustee securities. That is a restriction which does not apply to commercial concerns of any sort, and I see no reason whatever why a limitation of this description, which is not a normal commercial practice, should be put on this public Corporation. I think this body should have the same rights and privileges and opportunities as any ordinary industrial con-

cern, and not less, and for these reasons I cannot accept the Amendment.

Amendment negatived.

Clause 38.—(ACCOUNTS AND AUDIT AND STATISTICS.)

Mr. Peake: I beg to move, in page 41, line 46, at the end, to insert:
(2) The statements prepared under subsection (1) of this section shall disclose the name of each company in which the Corporation hold any interest otherwise than by way of investment under this Part of this Act and the extent and nature of that interest.
This is a matter which we discussed at considerable length in Committee. Under subsection (1) the Corporation are under the obligation to:
…keep proper accounts and other records and shall prepare…
first of all, a statement of the accounts of the Corporation in respect of each financial year and in respect of the first financial year in which it is practicable to do so:
…consolidated statement of accounts dealing with the state of affairs and profit and loss of the Corporation and the publicly-owned companies as a whole.
We propose the introduction of a subsection (2) to the effect that the statements prepared in subsection (1)—that is the statement of the accounts of the Corporation in respect of each financial year and the consolidated statement of account as soon as it is practicable for such an account to be produced—shall disclose the name of each company in which the Corporation hold an interest other than by way of investment under this part of this Bill; that is to say, otherwise than by virtue of Clause 36 which concerns the general power of investment.
What that means is that the accounts prepared under subsection (1) should disclose to this House and to the public the name of each company in which the Corporation hold any interest by way of their powers under subsections (1) and (2) of the new Clause 2 which the Minister introduced the other day. Under those provisions the Corporation have become in the main a holding company. Their duties are to hold all the ordinary share capital of the hundred and odd companies whose names are set out in the Third Schedule. But they are also empowered by the new subsections introduced by the right hon. Gentleman to


acquire a controlling interest in companies carrying on business whose objects are included in the memoranda of association of the Third Schedule companies. We suggest that these statements of account issued annually by the Corporation should tell the House and the public the name not only of the Third Schedule companies, but of other companies the control of which the Corporation have acquired under the new subsections which have recently been introduced into the Bill.

Mr. Mitchison: Would the right hon. Gentleman tell us if it would be in accordance with the best commercial standards to publish that information?

The Solicitor-General: The policy adopted in this Bill is to follow so far as can be the principles and procedure laid down in the Companies Act, 1948. That has been the general basis upon which these Clauses have been framed. Under the provisions of that Act, I think the right hon. Gentleman will agree that no commercial company is required to disclose the information which the Amendment seeks to make it necessary to disclose.

Mr. Lyttelton: They are not obliged to, but they usually do so.

The Solicitor-General: They do, and here in the case of the Corporation there will be no difficulty in obtaining information as one can in the case of an ordinary commercial company. In fact, under the terms of Clause 49 (2) there is already an obligation which does not go quite so far as the obligation which the right hon. Gentleman seeks to impose upon the Corporation, but it does go some way towards it. It provides that the Corporation shall keep available a list of companies which are for the time being publicly owned companies. In substance, the phrase "publicly-owned companies" as defined in the Definition Clause means companies which are wholly owned within the group.

Mr. Peake: Or partly owned.

5.45 p.m.

The Solicitor-General: Wholly owned within the group. That may be partly owned by one subsidiary of the Corporation and partly owned by another, but

they must be wholly owned within the group. These are the only companies in connection with which it is obligatory upon the Corporation to keep a list under the provisions of the Bill. There is no reason in practice to suppose that there would be any difficulty about obtaining exactly the same information from the Corporation as one can obtain from any other company. However, my right hon. Friend would be willing, if you would grant permission, Mr. Deputy-Speaker, to make a change in Clause 49. He would be ready to move a manuscript Amendment which would provide wording which would go a good deal of the way towards meeting what is asked in this Amendment. My right hon. Friend will seek to move a manuscript Amendment in Clause 49, page 51, line 46, after the word "companies," to insert the words:
and of the other companies (to be shown separately) which are for the time being subsidiaries of the Corporation.
That would bring in companies which are not wholly owned subsidiaries and which, therefore, are companies outside the present limit of the definition of publicly-owned companies. That seems to us to be a reasonable way of meeting the proposal. It does not go so far as to require the Corporation to set out the shareholding which they have in every single company, but it would bring into the ambit of the companies referred to in Clause 49 subsidiaries which are subsidiaries of the Corporation but not wholly owned subsidiaries. I hope that the House will agree that that is a perfectly reasonable and fair way of meeting the proposal which the right hon. Gentleman made in his Amendment.

Mr. Deputy-Speaker (Major Milner): I take it that there is not objection from any quarter of the House, and I imagine that there would be no difficulty in accepting the manuscript Amendment.

Mr. Lyttelton: This suggestion goes some way towards meeting us on this point, but it does not go quite as far as I should have liked. The disclosure is to be confined to subsidiaries. Perhaps before the right hon. Gentleman moves his manuscript Amendment he will consider an Amendment which might include all companies in which the Corporation has a substantial interest. The Solicitor-General asks me to define that. We have got the words "substantial interests"


in several places in the Bill already. We have been asked to swallow this description. I do not know whether I am accurate, but I think it would be true to say that, for instance, the British Government have not got a 51 per cent. interest in the Anglo-Iranian Oil Company, yet it is well known that that company is, in ordinary parlance, controlled by the Government or that its policy is very closely watched by His Majesty's Government.
I hope that the right hon. Gentleman will look at my suggestion, because the dangers in all these matters lie, as I said of another Clause, where the Minister of Supply finds it difficult to dispose of surplus steel of a particular kind. He is then driven, as are a great many amateurs in these matters, to buy shipbuilding companies or tubular furniture companies in order to absorb the steel. That is the kind of activity which we have sought to prevent, but where it takes place we think that it ought to be disclosed. The manuscript Amendment, as I understand it, would only apply to subsidiaries. Gift horses are extremely rare in the stables of the right hon. Gentleman, and I would very much like not to look this particular nag in the mouth. Nevertheless, I will only look it in the mouth to the extent of asking if the Minister could not make it a little more thoroughbred than it is now by the disclosure of information about all the companies in which the Corporation has a controlling interest.

Mr. G. R. Strauss: We have looked at this point made by hon. Members opposite, and we have gone a very long way to meet it. If we start to tackle the definition of a substantial or controlling interest, we shall get into all kinds of difficulties, and, legally, I am advised that we should arrive at an impossible situation to decide which of the subsidiaries will be in the list and subject to public scrutiny. I hope the Opposition will accept the Amendment which I have indicated, as it does go a very long way to meet their point.

Viscount Hinchingbrooke: I do not want to look a gift horse in the mouth either, as the right hon. Gentleman has been partially accommodating to us, and I rise only for the purpose of making a simple point. The Minister is going to produce this new information under Clause 49, which requires people to walk

down the street to the principal offices of the Corporation in order to get the information. Considering how comprehensive are the accounts and reports which have to go through the procedure under Clause 38 of being presented to Parliament and subsequently published, could not the Minister agree to provide this additional information in the report and accounts, since it would scarcely add another page to the document and would keep the House of Commons and the members of the public fully informed of the state of affairs?

Mr. Strauss: If I may speak again with the permission of the House, may I point out that there would be some hundreds of names? I think it is hardly necessary, since all these accounts and annual reports are presented to the House.

Mr. Peake: In view of what the right hon. Gentleman has said, I beg to ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Mr. Lyttelton: I beg to move, in page 41, line 46, at the end, to insert:
(2) The forms of the statements prepared under subsection (1) of this section shall be such as to secure the provision of separate information as respects each of the principal activities of the Corporation and the publicly-owned companies and to show as far as may be the financial and operating results of each such activity.
The purpose of this Amendment is to oblige the Corporation to disclose in its accounts whether the Corporation and the publicly-owned companies, taken as a whole, made a profit on each principal activity. I expect that hon. Members opposite will ask whether this is necessary in commercial practice, and I should be inclined to say that it is not, but we are here dealing with a vast variety of activities and a vast range of production far beyond the confines of any ordinary limited company. It is desirable in the public interest, which appeals to hon. Members opposite, that the broad categories in which this vast Corporation will carry on its activities should be disclosed to the public and to the House of Commons. The variety of production has often been stressed in this House, and it extends from Sydney Harbour Bridge to umbrella frames. It is undesirable that the losses, and perhaps the inefficiency in production, in any direction should be


concealed by the Corporation charging very high prices for another part of its production without the knowledge of the nation, who are in fact to be the only shareholders in the Corporation.
I know the argument will be advanced that this will lead to great difficulties in accounting, but there is nothing whatever in that argument, which was used by the Minister in the proceedings in Standing Committee. Nor do we mean by "the principal activities of the Corporation" going down to the subdivisions of those activities, but, broadly speaking, to differentiate the ordinary broad categories into which steel production is divided. For instance, I do not suggest that we should require to know about all the different types of wire, but it is to the public interest that we should know whether the wire has been drawn at a profit, or whether, on the other hand, the constructional steel part of the business has been carried on at a profit, and that this information should not be covered up in an overcoat way.

Mr. Attewell: May I ask the right hon. Gentleman a question? I suppose he would not think that it would mean more form-filling and waste of manpower?

Mr. Lyttelton: The hon. Member will be aware that even in a nationalised Corporation it is necessary to have some form of costing system and some guide as to what the Corporation are doing. This is merely a question of printing for the benefit of the public information which it is necessary that it should have.

Viscount Hinchingbrooke: The accounts are now to be produced by each constituent company, and the Government will be getting themselves into serious difficulty and lay themselves open to much criticism if they adopt the county agricultural executive committee technique in not stating what the costs are. I hope we shall be informed of these facts in respect of each one of these publicly-owned companies.

Mr. G. R. Strauss: I really do not think that it would be wise to put this burden on the Corporation, and for a number of reasons which will commend themselves to all quarters of the House. First of all, it would be a very onerous task, and, though I will not say that this is a conclusive reason, it certainly is one

that we must take into account. The principal activities are very considerable indeed. Secondly, it would mean that, with the large number of companies which are involved in carrying on these principal activities, we should probably have to re-organise the accounting and costing procedure of each one of a very large number of companies in order to get at the figures required. That would impose a very considerable burden on all these companies and on their accountants in making this change and coordinating their accounting and costing procedure to enable the Corporation to produce the figures required.
There is another reason which is also important. Is it really desirable that this public Corporation, which will have to compete with other countries in selling its products abroad, should publish from year to year all its costing information, and publish to the world exactly how much it costs for each product to be made in this country, as well as what changes are taking place? I doubt whether that is a wise thing to do. No company does it in the ordinary way of business, and no other organisation is asked to publish to the world exactly what its costs are in respect of all the major activities and of the products which it makes. For these reasons, I suggest that the proposal would not really lead to any greater satisfaction for the public. It would not give the House any useful knowledge, and it might be exceedingly harmful to the trading prospects of the Corporation and at the same time be a very substantial burden on the Corporation in accounting and costing.

Mr. Lyttelton: I am entirely dissatisfied with the argument which the Minister has advanced, and among the numerous tenuous arguments which I have heard his was easily the most tenuous. The argument was, first, that it is too much trouble, and, secondly, that other companies do not do it. But other companies do not engage in activities as wide as this; yet, every year, limited companies have to produce profit and loss accounts. I feel that we must divide the House against that idea, and I would say that obscurantism and restriction are the two pillars upon which the right hon. Gentleman proposes to build his national Corporation.

Question put, "That those words be The there inserted in the Bill."

The House divided: Ayes, 141; Noes, 297.

Division No. 122.]
AYES
[6.0 p.m.


Agnew, Cmdr. P. G.
Hare, Hon. J. H. (Woodbridge)
Nicholson, G.


Amory, D. Heathcoat
Harvey, Air-Comdre. A. V.
Noble, Comdr. A. H. P


Assheton, Rt. Hon. R.
Headlam, Lieut.-Col. Rt. Hon Sir C.
Odey, G. W.


Astor, Hon. M.
Henderson, John (Cathcart)
Peake, Rt. Hon. O.


Baldwin, A. E.
Hinchingbrooke, Viscount
Peto, Brig. C. H. M.


Barlow, Sir J.
Hollis, M. C.
Poole., O. B. S. (Oswestry)


Beamish, Maj. T. V. H.
Holmes, Sir J. Stanley (Harwich)
Price-White, Lt.-Col. D.


Beechman, N. A.
Hope, Lord J.
Prior-Palmer, Brig. O.


Bennett, Sir P.
Howard, Hon. A.
Raikes, H. V.


Boothby, R.
Hudson, Rt. Hon. R. S. (Southport)
Ramsay, Maj. S.


Bossom, A. C.
Hulbert, Wing-Cdr. N. J.
Reed, Sir S. (Aylesbury)


Bower, N.
Hurd, A.
Renton, D.


Boyd-Carpenter, J. A.
Hutchison, Lt.-Cm. Clark (E'b'rgh W.)
Roberts, H. (Handsworth)


Braithwaite, Lt.-Comdr. J. G.
Hutchison, Col. J. R. (Glasgow, C.)
Robinson, Roland (Blackpool, S.)


Bromley-Davenport, Lt.-Col. W.
Jeffreys, General Sir G.
Scott, Lord W.


Buchan-Hepburn, P. G. T.
Joynson-Hicks, Hon. L. W.
Shephard, S. (Newark)


Bullock, Capt. M.
Kerr, Sir J. Graham
Smith, E. P. (Ashford)


Butcher, H. W
Lambert, Hon. G.
Snadden, W. M.


Carson, E.
Lancaster, Col. C. G
Spearman, A. C. M.


Challen, C.
Legge-Bourke, Maj. E. A. H.
Stoddart-Scott, Col. M.


Clarke, Col. R. S.
Lindsay, M. (Solihull)
Strauss, Henry (English Universities)


Clifton-Brown, Lt.-Col. G.
Lipson, D. L.
Stuart, Rt. Hon. J. (Moray)


Crosthwaite-Eyre, Col. O. E.
Lloyd, Selwyn (Wirral)
Studholme, H. G.


Cuthbert, W. N.
Low, A. R. W.
Sutcliffe, H.


Darling, Sir W. Y.
Lucas, Major Sir J.
Taylor, C. S. (Eastbourne)


De la Bere, R.
Lucas-Tooth, S. H.
Taylor, Vice-Adm. E. A. (P'dd't'n, S.)


Digby, Simon Wingfield
Lyttelton, Rt. Hon. O.
Thomas, Ivor (Keighley)


Dodds-Parker, A. D.
MacAndrew, Col. Sir C.
Thorneycroft., G. E. P. (Monmouth)


Drewe, C.
McCallum, Maj. D.
Thornton-Kemsley, C. N.


Dugdale, Maj. Sir T. (Richmond)
McCorquodale, Rt. Hon. M. S.
Thorp, Brigadier R. A. F


Eccles, D. M.
McFarlane, C. S.
Touche, G. C.


Elliot, Lieut.-Col. Rt. Hon. Walter
McKie, J. H. (Galloway)
Turton, R. H.


Fleming, Sqn.-Ldr. E. L.
Maclay, Hon. J. S.
Tweedsmuir, Lady


Fletcher, W. (Bury)
MacLeod, J.
Vane, W. M. F.


Foster, J. G. (Northwich)
Macmillan, Rt. Hon. Harold (Bromley)
Walker-Smith, D.


Fox, Sir G.
Macpherson, N. (Dumfries)
Ward, Hon. G. R


Fraser, H. C. P. (Stone)
Maitland, Comdr. J. W.
Webbe, Sir H. (Abbey)


Fraser, Sir I. (Lonsdale)
Manningham-Buller, R. E.
Wheatley, Colonel M. J. (Dorset, E.)


Fyfe, Rt. Hon. Sir D. P. M.
Marlowe, A. A. H.
White, Sir D. (Fareham)


Galbraith, Cmdr. T. D. (Pollok)
Marsden, Capt. A.
White, J. B. (Canterbury.)


Galbraith, T. G. D. (Hillhead)
Marshall, D. (Bodmin)
Williams, Gerald (Tonbridge)


Gammans, L. D.
Maude, J. C.
Willoughby de Eresby, Lord


Gates, Maj. E. E.
Mellor, Sir J.
Winterton, Rt. Hon. Earl


George, Maj. Rt. Hn. G. Lloyd (P'ke)
Molson, A. H. E.
York, C.


Glyn, Sir R.
Morris, Hopkin (Carmarthen)
Young, Sir A. S. L. (Partick)


Gomme-Duncan, Col. A.
Morrison, Maj. J. G. (Salisbury)



Gridley, Sir A.
Mott-Radclyffe, C. E.
TELLERS FOR THE AYES:


Grimston, R. V.
Neven-Spence, Sir B.
Major Conant and




Brigadier Mackeson.




NOES


Acland., Sir Richard
Braddock, T. (Mitcham)
Davies, Edward (Burslem)


Adams, Richard (Balham)
Bramall, E. A.
Davies, Harold (Leek)


Albu, A. H.
Brook, D. (Halifax)
Davies, Haydn (St. Pancras, S. W.)


Allen, A. C. (Bosworth)
Brooks, T. J. (Rothwell)
Davies, R. J. (Westhoughton)


Alpass, J. H.
Broughton, Dr. A. D. D.
Davies, S. O. (Merthyr)


Anderson, A. (Motherwell)
Brown, George (Belper)
Deer, G.


Attewell, H. C.
Brown, T. J. (Ince)
de Freitas, Geoffrey


Austin, H. Lewis
Bruce, Maj. D. W. T.
Diamond, J.


Awbery, S. S.
Burke, W. A.
Dobbie, W.


Ayles, W. H.
Byers, Frank
Dodds, N. N.


Ayrtan Gould, Mrs. B
Callaghan, James
Donovan, T.


Bacon, Miss A.
Carmichael, James
Driberg, T. E. N.


Balfour, A.
Castle, Mrs. B. A.
Dugdale, J. (W. Bromwich)


Barnes, Rt. Hon. A. J.
Chamberlain, R. A.
Ede, Rt. Hon. J. C.


Barstow, P. G.
Chetwynd, G. R.
Edwards, Rt. Hon. Sir C. (Bedwellty)


Barton, C.
Cluse, W. S.
Edwards, John (Blackburn)


Battley, J. R.
Cocks, F. S.
Edwards, Rt. Hon. N. (Caerphilly)


Bechervaise, A. E.
Collick, P
Evans, Albert (Islington, W.)


Benson, G.
Collins, V. J.
Evans, E. (Lowestoft)


Beswick, F.
Colman, Miss G. M.
Evans, John (Ogmore)


Bing, G. H. C
Comyns, Dr. L.
Evans, S. N. (Wednesbury)


Binns, J.
Corlett, Dr. J.
Fairhurst, F.


Blackburn, A. R
Cove, W. G.
Farthing, W. J


Blenkinsop, A.
Crawley, A.
Field, Capt. W. J


Boardman, H.
Crossman, R. H. S.
Fletcher, E. G. M. (Islington. E.)


Bowden, Flg. Offr. H. W.
Cullen, Mrs.
Follick, M


Braddock, Mrs. E. M. (L'pl. Exch'ge)
Daggar, G.
Foot, M. M




Forman, J. C.
Mackay, R. W. G. (Hull, N. W.)
Sharp, Granville


Fraser, T. (Hamilton)
McKinlay, A. S
Shawcross, Rt. Hn Sir H (St. Helens)


Freeman, J (Watford)
McLeavy, F
Shinwell, Rt. Hon E.


Ganley, Mrs C. S.
MacPherson, Malcolm (Stirling)
Shurmer, P


George, Lady M. Lloyd (Anglesey)
Mainwaring, W. H.
Silverman, J. (Erdington)


Gibbins, J
Mallalieu, E. L. (Brigg)
Silverman, S. S. (Nelson)


Gilzean, A.
Mallalieu, J. P. W. (Huddersfield)
Simmons, C. J.


Glanville, J. E. (Consett)
Mann, Mrs. J.
Skeffington, A. M.


Gooch, E. G.
Manning, C. (Camberwell, N.)
Skeffington-Lodge, T. C


Goodrich, H. E.
Manning, Mrs. L. (Epping)
Skinnard, F. W.


Greenwood, A. W. J. (Heywood)
Mathers, Rt. Hon. George
Smith, Ellis (Stoke)


Grenfell, D. R
Medland, H. M.
Smith, H. N. (Nottingham, S.)


Grey, C. F.
Mellish, R. J.
Smith, S. H. (Hull. S.W.)


Grierson, E.
Messer, F.
Snow, J. W


Griffiths, D. (Rother Valley)
Middleton, Mrs. L
Solley, L. J.


Griffiths, W. D. (Moss Side)
Mikardo, Ian
Sorensen, R. W


Guest, Dr. L. Haden
Mitchison., G. R
Soskice, Rt. Hon.[...] Frank


Gunter, R. J
Monslow, W.
Sparks, J. A


Guy, W. H.
Moody, A. S.
Steele, T.


Hale, Leslie
Morgan, Dr. H. B.
Stewart, Michael (Fulham, E.)


Hall, Rt. Hon. Glenvil
Morris, P. (Swansea, W.)
Stokes, R. R.


Hamilton, Lieut.-Col. R.
Morrison, Rt. Hn. H. (Lewisham. E.)
Strauss. Rt. Hon G. R. (Lambeth)


Hannan, W. (Maryhill)
Mort, D. L.
Stross, Dr. B.


Hardman, D. R.
Moyle, A.
Stubbs, A. E.


Hardy, E. A.
Murray, J. D.
Swingler, S.


Harrison, J.
Naylor, T. E.
Sylvester, G. O.


Hastings, Dr. Somerville
Neal, H. (Claycross)
Symonds, A. L.


Haworth, J.
Nichol, Mrs. M. E. (Bradford, N.)
Taylor, H. B. (Mansfield)


Henderson, Rt. Hon. A (Kingswinford)
Nicholls, H. R. (Stratford)
Taylor, R. J. (Morpeth)


Hicks, G.
Noel-Baker, Capt. F. E. (Brentford)
Taylor, Dr. S. (Barnet)


Holman, P.
Oldfield, W. H
Thomas, D. E (Aberdare)


Holmes, H. E. (Hemsworth)
Oliver, G. H
Thomas, George (Cardiff)


Horabin, T L
Orbach, M.
Thomas, I. O. (Wrekin)


Houghton, A L N D
Paling, Will T. (Dewsbury)
Thurtle, Ernest


Hoy, J.
Palmer, A. M. F.
Timmons, J.


Hubbard, T.
Pargiter, G. A.
Tomlinson, Rt. Hon. G


Hudson, J. H. (Ealing, W)
Parker, J.
Turner-Samuels, M.


Hughes, Emrys (S. Ayr)
Parkin, B. T.
Vernon, Maj. W F


Hughes, H. D. (W'lverh'pton. W)
Paton, Mrs. F. (Rushcliffe)
Viant, S. P.


Hynd, H. (Hackney, C.)
Paton, J. (Norwich)
Walker, G. H


Hynd, J. B. (Attercliffe)
Pearson, A.
Wallace, G. D. (Chislehurst)


Irvine, A. J. (Liverpool)
Peze[...]t, T. F
Wallace, H. W. (Walthamstow, E.)


Irving, W. J. (Tottenham, N.)
Perrins, W.
Warbey, W. N.


Isaacs, Rt. Hon. G. A
Piratin, P.
Webb, M. (Bradford, C)


Janner, B.
Popplewell, E
Weitzman, D.


Jay, D. P. T.
Porter, E. (Warrington)
Wells, P. L. (Faversham)


John, W
Porter, G. (Leeds)
Wells, W. T. (Walsall)


Johnston., Douglas
Price, M. Philips
West, D. G


Jones, D. T. (Hartlepool)
Pritt, D. N.
Wheatley, Rt. Hn. J. T. (Edinb'gh. E.)


Jones, Jack (Bolton)
Proctor, W. T.
White, H. (Derbyshire, N. E.)


Jones, P. Asterley (Hitchin)
Pryde, D. J.
Whitely, Rt. Hon. W


Kenyon, C.
Pursey, Comdr. H.
Wigg, George


Kinghorn, Sqn.-Ldr E
Randall, H. E.
Wilcock, Group-Capt. C A B


Kinley, J.
Ranger, J.
Wilkins, W A


Kirby, B V
Rees-Williams, D. R
Willey, O. G. (Clevaland)


Lang, G.
Reeves, J.
Williams, D. J. (Neath)


Lawson, Rt. Hon. J. J
Reid, T. (Swindon)
Williams. J. L. (Kelvingrove)


Lee, Miss J. (Cannock)
Rhodes, H.
Williams, Ronald (Wigan)


Leonard, W.
Ridealgh, Mrs. M
Williams, Rt. Hon. T. (Don Valley)


Leslie, J. R
Robens, A.
Williams, W. T (Hammersmith, S.)


Levy, B. W
Roberts, Emrys (Merioneth)
Williams, W. R (Heston)


Lewis, A. W. J. (Upton)
Roberts, Goronwy (Caernarvonshire)
Willis, E.


Lewis, J. (Bolton)
Roberts. W (Cumberland, N)
Wilson, Rt. Hon. J. H


Lewis, T. (Southampton)
Robertson, J. J. (Berwick)
Wise, Major F. J.


Lipton, Lt.-Col. M
Robinson, K. (St. Pancras)
Woodburn, Rt. Hon A


Logan, D. G.
Rogers, G. H. R.
Wyatt, W


Lyne, A. W.
Ross, William (Kilmarnock)
Yates, V F


McAdam, W.
Royle, C.
Young, Sir R (Newton)


McAllister, G.
Sargood, R.
Younger, Hon. Kenneth


McEntee, V. La T.
Scollan, T.
Zilliacus, K.


McGhee, H. G
Scott-Elliot, W



Mack, J. D.
Segal. Dr S
TELLERS FOR THE NOES:


McKay, J. (Wallsend)
Shackleton, E A A
Mr. Joseph Henderson and




Mr. Collindridge.

It being after Six o' Clock, Mr. DEPUTY-SPEAKER proceeded, pursuant to Order, successively to put forthwith the Questions on the Amendments moved by the Government of which notice had been given to that part of the Bill to be

concluded at Six o'Clock at this day's Sitting.

Amendments made: In page 42, line 3, at end, insert:
and the auditors shall make a report on the accounts examined by them and on the state-


ments of accounts prepared under the preceding subsection, and the report shall contain statements as to the matters mentioned in the Schedule to this Act (Matters to be expressly stated in Auditors' Report).

In line 19, leave out "any," and insert "the."

In line 20, leave out "statements," and insert "copies."

In line 25, leave out "statement," and insert "copy."

In line 32, leave out "any," and insert "the."

In line 34, leave out from first "of," to "shall," and insert:
every statement, account and report required to be sent to the Minister under this subsection.

In line 36, leave out "those statements and reports," and insert "every such statement, account and report."—[Mr. G. R. Strauss.]

Clause 39.—(MACHINERY FOR SETTLING TERMS AND CONDITIONS OF EMPLOY- MENT OF STAFF, ETC.)

Amendments made: In page 43, line 40, leave out their workers, "and insert" persons employed by them."

In line 41 leave out "their workers," and insert "persons employed by them."—[Mr. G. R. Strauss.]

Clause 40.—(PROVISIONS AS TO PENSION RIGHTS.)

Amendments made: In page 43, line 47, leave out "publicly-owned company," and insert "company which comes into public ownership."

In page 45, line 10, at end, insert:
(4) Where, by reason of any such amendment, repeal, revocation, transfer, extinguishment or winding-up as is mentioned in subsection (2) of this section, loss is suffered by any person (not being a publicly-owned company) liable as an employer to make contributions or to pay pensions under the existing pension scheme in question, the Corporation shall pay compensation to that person in respect of that loss, and the amount thereof shall, in default of agreement between the Corporation and that person, be determined by arbitration under this Act."—[Mr. G. R. Strauss.]

6.15 p.m.

Clause 44.—(PROCEDURE AND ENFORCE- MENT OF ORDERS OF ARBITRATION TRIBUNAL.)

Mr. Selwyn Lloyd: I beg to move, in page 49, line 14, to leave out "on a claim."
This Amendment goes with the following Amendment, in line 15, which I understand is not to be selected.

Mr. Deputy-Speaker: I understand that this Amendment goes with the next half-dozen or so Amendments in page 49, lines 15, 16 and 45, and page 50, lines 1 and 3. It would be for the convenience of the House, perhaps, if they were discussed together.

Mr. Selwyn Lloyd: I am not in any way challenging your Ruling, Major Milner, but am seeking further information. I understood that you did not intend to select the first Amendment in line 15.

Mr. Deputy-Speaker: I assume that that Amendment and the others to which I have referred, are consequential to the one which the hon. and learned Member has moved.

Mr. Selwyn Lloyd: Perhaps I may speak to the Amendments to which you referred, Mr. Deputy-Speaker, and if any of them do not strictly follow perhaps there will be a chance of discussing them at a later stage. I think the point of general principle is fairly clear and, as I spoke on this matter for half an hour during the proceedings in Standing Committee, I can move this Amendment in very short terms.
Clause 44 deals with the procedure and enforcement of orders of the Arbitration Tribunal and subsection (3) provides that the tribunal may state a special case for determination by the Court of Appeal relating to any question of law which may come before them
and an appeal shall lie to the Court of Appeal on any question of law or fact from any determination or order of the arbitration tribunal on a claim under Section eighteen.…
Section 22, Section 24 or Section 25 of the Act. Clause 18 of the Bill deals with the question of the
control of dividends, interest and other payments
and the sort of matter which presumably might come before the tribunal under that Clause is whether the directors of any company were likely to have to repay any moneys which have been wrongly distributed by way of dividends. So far as Clause 22 is concerned, it deals with the transfer of iron and steel works and enables the Corporation to recover before


the tribunal sums sufficient to make good any loss which the Corporation have suffered by iron and steel works, or any rights under them, being wrongly transferred. Clause 24 deals with the dissipation of assets and again, under that Clause, there is provision for recovery from directors of any sums wrongly distributed. Clause 25 deals with
Other transactions resulting in the dissipation of assets.
In all those Clauses under which the Corporation have the power to recover, provided the tribunal so orders, loss or moneys distributed through the directors, the Government have seen fit to incorporate a right of appeal on questions of law and fact. We on these benches do not quarrel with that decision because it seems to be perfectly right and proper in relation to such matters, particularly in view of their complications; it is only just that there should be an appeal on both questions of law and fact. In the Bill, however, there are a number of other Clauses which deal with proceedings in front of the Arbitration Tribunal, and two Clauses to which we refer in particular are Clause 13, which is dealt with in the second of these Amendments, and Clause 23. In relation to proceedings concerning the provisions of those Clauses, as the Bill stands there is appeal only, on matters of law; there is no appeal on matters of fact.
If we look at Clause 13 we shall see that that Clause relates to the disclaimer of agreements and leases. As the House has already discussed the provisions of that Clause to some extent, I will not delay proceedings by relating them in any great detail, but the House may remember that under that Clause any contract or any agreement of any sort or kind which has been varied or made by one of the companies concerned can be declared by the Corporation, in certain circumstances, in effect to be frustrated. In other words, parties to such agreements or contracts lose all their rights under them, however innocent they may be. That Clause includes a provision that if such a notice having the effect which I have stated may be served on the parties to an agreement, then they have the right to go before the Arbitration Tribunal and the tribunal has to come to conclusions, subject to certain conditions set out in the Clause, and to decide whether the

notice given by the Corporation is to be revoked or not.
What we say with regard to such matters is that there ought also to be an appeal on questions of law and of fact from the decision of the Arbitration Tribunal. The argument which the right hon. Gentleman, or one of his assistants, adduced in the Committee was that it was unnecessary to make that provision with regard to Clause 13, because it really would not penalise the parties concerned to anything like the same extent. I do not think I am doing injustice to the Government's argument in trying to compress it into that sentence. The frustration of an agreement or a lease may have the most devastating effects on the persons participating. It may affect their whole livelihood and future, and may have the most serious consequences. Therefore, on the ground of the extent of the damage that may be done, I suggest that there is no reason at all for differentiating between this Clause and the other Clauses mentioned here.
The other point which is material is that of complication. It seems to me that some of the matters that may have to be decided under Clause 13 can be of the utmost complexity. In those circumstances it is a very wise provision to make it possible for an appeal to be made. We were asked, "What is the use of having the Arbitration Tribunal at all if we permit an appeal on a question of fact from it?" In the High Court, if a judge tries a case alone, it is possible for the Court of Appeal to consider that case and decide, on the evidence adduced before that judge, if it would have come to the same conclusions. In fact, broadly speaking, there is an appeal on a question of fact when a judge is sitting alone. I see no reason why there should not be precisely the same position in relation to this tribunal. The matters will be of great complexity, and it may be difficult impartially to sift the evidence. I would say that there should be an opportunity for an appellate tribunal to consider whether, on all the evidence which has been adduced, it would have come to the same conclusions as the Arbitration Tribunal. That goes for Clause 13.
The other Clause to which I will refer, quite briefly, is Clause 23. That Clause is the one which deals with the recovery of assets transferred by a company which


comes into public ownership. The important part of that Clause, from the point of view of my argument, is that which says that the Minister can recover under it any rights of ownership, or rights in respect of the user of any works, or any rights in respect of the user of any invention or registered design. He can authorise the Corporation to serve a notice of acquisition on a person in whom such rights are vested, stating that they are to be vested or surrendered in accordance with the Sixth Schedule. The Clause defines the expression "user," and says:
the expression 'user,' in relation to an invention means any making, use or vending of the invention and, in relation to a registered design, means any manufacture or sale of the articles to which the design has been applied; and the expression 'registered design' means any design registered under the Patents and Designs Act, 1907.
I mention that to show to the House the very great complexity of the matters which may come before the tribunal, in particular in relation to derived rights. I do not want to bore the House with a long argument on the matter. I am trying to compress it. Under this particular Clause there may be a series of most complicated matters of fact, and, indeed, also of law, to be decided by the tribunal. There again, if justice is to be done, I think it is necessary for there to be the safeguard of an appeal to an appellate tribunal on questions of fact as well as of law. I think it is necessary there should be that appeal in the interests of both parties, because the Corporation, the taxpayer, is also interested in these matters; and I think that justice can be done only if there is some set-up for dealing with these matters, as I suggest there is in the High Court for dealing with matters which are tried by a judge sitting alone.

Mr. H. Fraser: I beg to second the Amendment.
I am in no way a legal expert, but it seems perfectly clear, from what my hon. and learned Friend the Member for Wirral (Mr. Selwyn Lloyd) has said, that matters of fact can and do arise to a very marked degree under both these Clauses. I would point out to the Solicitor-General that the two Clauses to which my hon. and learned Friend has referred are possibly the most retroactive provisions of this very retroactive and restrictive Bill. Clause 13 is retroactive to 21st October, 1947. We do not know

when the vesting date will be, but it may not be until some time in 1951. That will mean a very long period of time—between 1947 and 1951—during which companies may enter into agreements and leases, to be frustrated later by the Corporation when it is set up. The Corporation will thus be responsible for causing companies to disclaim many things they will have done between 1947 and—shall we say—mid-1951, which is a very long time.
The same consideration applies to the recovery of assets. In this case the time is from 1948 to some date in 1951. In a discussion we had about this in Standing Committee, the Solicitor-General tried to establish the point that as long as appeals were made on questions of law, all would be well. However, under Clause 23, as my hon. and learned Friend has pointed out, many cases must occur in which the question is a question of fact, and on which there should be appeal. In a period of as long as four years, there may even arise the question, which may prove a difficult one to answer, whether a notice of acquisition was served, or whether it was withdrawn or revoked. The period of time involved is a very considerable one, and it is perfectly clear that questions of fact may arise.
In other matters, as, for instance, those concerning the paying out of dividends, the transfer of iron and steel works, certain other transactions, and the dissipation of assets, the Government have agreed that there should be an appeal on fact as well as an appeal on law. It seems only logical that that provision should also apply, and apply just as much, to Clauses 13 and 23, as to Clauses 18, 22, 24 and 25. I hope I have made my point clear as a non-legal person. It stands out most clearly, perhaps, to someone with no knowledge of the law that here a manifest injustice is being done—unless the Government accept our Amendment.

The Solicitor-General: The issue raised by the Amendment, as has been clearly stated by the hon. and learned Member for Wirral (Mr. Selwyn Lloyd) and the hon. Member for Stone (Mr. H. Fraser), is simply whether there should be the right of appeal on fact as well as on law, in these two additional Clauses,


Clause 13 and Clause 23, or whether the appeal on fact or law should be limited to the Clauses specified in the subsection, namely, Clauses 18, 22, 24 and 25. The Amendment—or the argument of the hon. Members—seems to me to overlook one important consideration in all arbitrations. One of the purposes of arbitration is to get finality. People who go to arbitration instead of going to the courts do so largely because they regard it, rightly or wrongly, as a way of getting finality sooner than if they go through the ordinary processes of appeal from one court to another. We had that in mind in framing this Clause as we have done.
6.30 p.m.
We have selected the Clauses under the Bill which may result in persons against whom a finding is made being called upon to pay large sums of money, and we have thought it right, in the case of such Clauses, where persons may find themselves faced with a large money judgment against them as a result of arbitration, to say that an appeal should be not only on law but on fact. We say that the appeal should be completely unlimited: that the whole case from A to Z can be gone into again. We have limited that to the cases where persons are liable to find themselves faced with very heavy penalties. No one is going to criticise that.
In the case of persons who come within the purview of Clauses 13 and 23, where they are not likely to find themselves faced with a large liability—indeed they cannot—we say that an appeal should be only on law. Under Clause 13, it is true that arbitration may declare that a contract in which a person is involved has become frustrated with the result that the person has to pay a certain amount of money back. Under the Law Reform (Frustrated Contracts) Act, 1943, and cases of that sort, all, to put it broadly, that individuals can be called upon to pay is the amount of benefit which they have actually received or the value of some advantage which they have actually enjoyed. It is a very limited liability which can be imposed on a person against 'whom a finding is made under Clause 13. They are not at all in the same situation as the person who comes within the ambit of Clause 22 and the others.

The same argument applies with regard to Clause 23.
Clause 23 is the Clause which enables the Corporation to get back assets which have been transferred by Third Schedule companies to others. In the case of Clause 23, there is again special reason why we have not given an unlimited right of appeal. It is this: paragraph 3 of the Sixth Schedule provides a right of compensation to persons who are affected by Clause 23. It gives them a right of compensation in quite generous terms. Therefore, again we say that a person who comes within the ambit of Clause 23 cannot and should not be entitled to an unlimited right of appeal. With regard to persons affected by Clauses 13 and 23, I am not saying that they are necessarily put in a more disadvantageous position. They may be people who are glad to get an issue of fact finally decided.
The hon. and learned Member for Wirral said that the issues raised are complicated issues. They are complicated issues, but there is a right of appeal by way of case stated for those persons who, as a result of the application of Clause 13 and 23, may find themselves adversely affected. They may well be, and we think that they would be, in the ordinary case, desirous of getting the issue of fact, which is a troublesome matter to decide in the first instance, decided by the Arbitration Tribunal once and for all. It is for that reason that we have drawn the line where we have.
We could go on adducing arguments on one side or other of the line almost for ever. One could instance cases that seemed to point one way and cases that seemed to point the other. We feel that it is in the interests of the litigants themselves that they should not be faced with the prospect of an appeal on an issue of fact in a case of that sort. They would not be the only persons who would be given the right of appeal if there were a right of appeal on an issue of fact. The Corporation would equally have the right. Persons who get involved in proceedings under Clauses 13 and 23 may well think that they would rather that neither side was able to re-open the issue of fact. They would sooner get the issue of fact decided between them and the Corporation once and for all, so that neither side could take it farther. People very often feel if they can be taken


up by way of appeal by the opposing party, that they are considerably harassed and they would rather get the matter decided once and for all.
Therefore, we accept the position that complicated issues are likely to arise. That we do not dispute, and it is for that reason that we give a right of appeal on questions of law by way of case stated in all the Clauses concerned, but in the cases mentioned in the Amendment we have thought that the persons involved in them would far sooner that neither they nor the Corporation had the right of reopening the issue on fact and would rather get that decided once and for all. It is for that reason that I ask the House to say that we have arrived at the most reasonable solution of this problem and that the Clause should remain as it is.

Mr. David Renton: It seems to me that the distinction made by the Government and so lucidly described by the learned Solicitor-General is an illogical and arbitrary one. The Clauses with which we are dealing, namely, Clauses 13, 18, 22, 24, 25 and 23 are all of a very similar nature, and, not only that, but it seems to me, they could overlap to such an extent that when it came to enforcing them those authorities who had to enforce them might not be able to make their selection in any one set of circumstances as to which of several Clauses they should act upon. For instance, Clauses 23, 24 and 25 are so similar and, I suggest, so obviously overlap that if the authorities trying to recover property or money in certain circumstances to which each of these Clauses may apply decided that they wanted to exclude the possibility of an appeal to the Court of Appeal, they would, as the Bill now stands, obviously act under Clause 23 and refrain from proceeding under Clauses 24 and 25, which is hardly just.
The question arises whether important and difficult questions of fact are likely to come up and have to be decided by the Tribunal under proceedings under Clause 13. Hon. Members who were present on Thursday night of last week when the discussion on Clause 13 was stopped by the Guillotine, just when it was reaching an interesting stage in the middle of the speech of my right hon. and learned Friend the Member for West Derby (Sir D. Maxwell Fyfe), will remember that the Minister of Supply and

my right hon. and learned Friend did point out that that Clause was intended to stop, as the Minister said, any "funny business"; in other words, anything in the nature of fraud. I am sure that hon. Members on both sides who are in the legal profession will agree with me that the courts have come up against very great controversy and considerable difficulty when deciding any question of fact in which fraud is alleged.

Mr. G. R. Strauss: I am sorry to interrupt the hon. Gentleman, but I think that he is misrepresenting what I said. I never mentioned fraud. I was talking about action taken in anticipation of the Act with the purpose of disadvantaging the Corporation and advantaging the company concerned.

Mr. Renton: If that does not come pretty near to a statement by the right hon. Gentleman that he was trying to prevent fraud, I do not know what he means. What is "funny business" if it is not something very close to fraud? It may be that my right hon. and learned Friend the Member for West Derby was right when he suggested that "funny" in this connection should be read as "funny ha, ha" and not "funny peculiar." At any rate, leaving that aside, I think it is perfectly clear that the questions of fact which will have to be decided under Clause 13 are quite as difficult as those which will arise under Clauses 18, 22, 24 and 25. Therefore, why make this quite ridiculous distinction? I hope that the hon. and learned Member for Wirral (Mr. Selwyn Lloyd) will press this Amendment.

Mr. John Foster: The question before the House is whether there should be an appeal on fact with regard to Clauses 13 and 23. The House will remember that the Solicitor-General maintained that the object of arbitration was to get questions of fact settled without a right of appeal, so that people could have finality. I think he overlooked the fact that arbitration is voluntary, whereas here the Government are forcing people into arbitration. There is a great difference between that and a person agreeing with his opponent in the City of London to submit, say, the quality of wheat to an arbitrator in the wheat market, because it is very likely that he would want that question of fact to be


finally decided by an arbitrator skilled in determining different types of wheat. In this case the Government are laying down that, on questions of fact under Clauses 13 and 23 there shall be no appeal to the Court of Appeal.
If we look at the composition of the tribunal we find that the very weighty questions of fact alluded to by my hon. and learned Friend the Member for Wirral (Mr. Selwyn Lloyd) are submitted to a tribunal which—without any disrespect to the lawyer who may be chosen as head of it or the two businessmen—is not of a standing comparable to that of a judge of the High Court. Obviously, in most cases there is no appeal from a judge of the High Court on questions of fact; but it must be remembered that those judges are chosen after very careful selection by the Lord Chancellor, and are persons of very high standing. On no argument could the lawyer who is to preside over this tribunal be one of those. Even judges of the High Court sometimes make what in the general opinion is a mistake about facts; but the disadvantage of that is outweighed by the advantage of which the Solicitor-General was speaking—the getting of finality.
It has always been said to be a curious anomaly that everybody is supposed to know the law except His Majesty's judges, who have the Court of Appeal set over them to put them right. That is a curious fact, but it is justified on the principles on which we run our system of justice. But with an arbitration tribunal very grave questions of fact can be decided once and for all. It is rather in the philosophy of the present Government to fall into the error of thinking that people want a kind of people's court, or even a court with a lawyer of high standing, to decide questions of fact finally; but if in the opinion of the litigant or of his advisers the question of fact is wrongly decided, there is a burning sense of injustice if there is no right of appeal.
6.45 p.m.
The Solicitor-General's argument that these litigants want finality, that they do not want a right of appeal, is another example of "Whitehall knows best." He is saying: "We are doing this out of kindness to them. They do not really want an appeal, although they may think they do. That is why we do not

allow it." Even that argument can be met, because the litigant who does not like this right of appeal and does not want it, can always agree with the Corporation that in his particular case there shall be no right of appeal. That is all he has got to do. If there be a large or a small class of these persons to whom the Solicitor-General refers, they can, before starting their arbitration, agree with the opposing side that there shall be no right of appeal on questions of fact. But in all the other cases, unless there is a High Court judge sitting as permanent president of the tribunal, there is no argument for making questions of fact non-appealable. In another century somebody said of a particular judge: "He was courteous; he was slow; he was always wrong: he had the qualities of a great judge." That does not apply nowadays. On important questions nothing less than a person of the standing of a High Court judge is sufficient to decide that question of fact once and for all, without the right of appeal.
Except to a lawyer of great experience it is very difficult to arrive at the distinction between law and fact; there is a very thin dividing line between the question of law and the question of fact where they are mixed; it is very difficult for a lawyer who is sitting with two laymen to extricate questions of law from questions of fact. It is in those cases, in which, as my hon. and learned Friend said, incalculable results may come from a notice of acquisition under Clause 23, that we urge the Government to extend the right of appeal on law and fact, which they have granted under the other Clauses.
In my submission, it would be very wrong to apply certain principles to one set of Clauses, where the Government have provided for a right of appeal on law and fact, and to have another principle under Clauses 13 and 23. The distinction which the Solicitor-General sought to draw between cases where the person might find himself under a heavy liability—namely, those Clauses under which he was arguing a right of appeal on law and fact is granted—also applies to some aspects of Clauses 23 and 13.
The right hon. and learned Gentleman invoked the Law Reform (Frustrated Contracts) Act. As I understand it—I am sure he will correct me if I am wrong


—if a very large sum has been paid in advance for a lease or under a contract which has been frustrated, there may be a very large liability to pay it back; it can amount to a very large sum, and I do not see how the Solicitor-General can say that under Clauses 13 and 23 there will be no big liability. I can imagine a case arising where a very large down payment has been made, where the contract is deemed to have been frustrated, and where the financial re-arrangement, owing to the Bill, might be very large. It seems to me that in this case the Government are just digging their toes in because they feel that they do not want to give way, or that if they do they might lose face. They should accede to the reasonable argument of my hon. and learned Friend and the hon. Member for Stone (Mr. H. Fraser).

Mr. Maclay: Like the hon. Member for Stone (Mr. H. Fraser) I enter this discussion with some fear as it is undoubtedly a legal problem, on which I am no expert. However, as I understand we are discussing the Scottish application and the Amendments dealing with the Scottish situation, I think it necessary that I should say a little about that. Members of Parliament know how highly valued in Scotland is the right of appeal on questions of fact particularly where business is concerned. Every word that has been said by my hon. Friends applies with greater force to Scotland. The problem we have to face is that increasingly this Government are making people feel that their right of appeal is being taken from them in Act after Act, and the Minister should pay attention to such arguments. It is a very serious thing for this Government that that feeling is growing strongly and particularly is that so throughout Scotland. I hope the right hon. Gentleman will pay attention to Scottish feeling in this matter.

Mr. Attewell: We have listened to the case put forward by the Opposition by an array of members of the legal profession. As a layman, I want to place before the House some of the facts which appear to me to arise from the other side of the case and which meet the arguments from members of the legal profession. I would ask hon. Members to decide whether they consider that the case put forward from the Opposition benches denies the ability of the ordinary layman selected as members of the tribunal to de-

cide questions of fact. In regard to questions of law I make no dispute, but on questions of fact, it is quite possible for three men chosen by the Lord Chancellor to come to a just conclusion as to whether a certain action performed under Clauses 13 or 26 was a matter of fact.
This is not a new thing. For many years many of us have been on arbitration boards under the Unemployment Acts which decided questions of fact. All through those years the legal profession has protested and asked that these matters be made questions of law in order that they should go to the courts, but the average person appearing before these tribunals knows that it is quite possible for three persons around a table to come to a decision on a question of fact.
What has the tribunal to decide and what is the composition of the tribunal? First the chairman has to be a member of the legal profession. He has to be selected by the Lord Chancellor. The Lord Chancellor will not select a person who is without a knowledge of legal matters, but he will choose one who has an adequate knowledge of the law as it affects the business life of this country. As to the other two members, it will be seen that one of them shall be a person of experience in business and the other a person of experience in finance. With those three persons sitting round the table is it seriously contested that they will not be able to decide whether a lease or agreement has been broken. It is quite possible for those three persons to decide that matter.
The hon. Member for Stone (Mr. H. Fraser) put forward the suggestion that these Clauses were retrospective in their action. He mentioned 1947 in one case and 1948 in another. Are the Members of this House to believe that when an announcement was made as to the Government's intention to nationalise the iron and steel industry these captains of industry did not realise that that would become an actual fact?

Mr. Renton: Is the hon. Gentleman saying that a mere Ministerial statement, which may never be fulfilled or at any rate perhaps not for several years, is to be taken by the citizens of this country as a warning that at some possible future date the whole of their rights at the time of the statement shall be altered?

Mr. Attewell: I am trying to destroy the case put forward by the hon. Member Stone that this Clause is retrospective, in its action, and that in 1947–48 it was to be expected that the people concerned with business would not realise what were their obligations. These are not ordinary commitments or undertakings that would take place in the ordinary run of business. There would be some ulterior motive behind them.
The Minister was asked whether certain persons were dishonest. It may be within the recollection of Members that there is dishonesty in business no matter how small it is, and if they do not believe that, then let us have the facts of life presented to us. We are legislating for people who commit these acts. When the Minister asks us to reject this Amendment his request should be agreed to by Members on this side of the House, because I believe that it is quite possible for any three persons with the qualities laid down in this Clause to be capable of deciding a question of fact.

Mr. Henry Strauss: The hon. Member for Harborough (Mr. Attewell) complained that this discussion had been conducted mainly by lawyers. Having regard to the particular Clauses which we are considering that is a natural thing, and it was eminently proper that the right hon. And learned Gentleman the Solicitor-General should have replied for the Government. The case was admirably put by my hon. and learned Friend the Member for Wirral (Mr. Selwyn Lloyd) and I shall only add a few words on two points. I cannot help thinking that the advantages which the Solicitor-General thinks he will derive by rejecting our Amendments are in fact illusory. I cannot avoid thinking that he would have been very much happier if he could have made a speech accepting our Amendment.
The first point in which he was demonstrably wrong was pointed out by my hon. Friend the Member for Northwich (Mr. J. Foster). The Solicitor-General said that people go to arbitration in order to get a final determination of fact. Surely there is all the difference in the world between people voluntarily

giving up their rights of going to the courts by choosing arbitration and their being compelled to do so. Here the arbitration is not one entered into willingly by the persons concerned; it is the sole tribunal compulsorily laid down by the Act. It is equally true, as I think the Solicitor-General will agree, that one of the reasons why people often decide not to go to arbitration but to go to court is that they will have a very much greater right of appeal.
7.0 p.m.
Except as regards two Clauses of the Measure, the Government and the Opposition are at one in thinking that there should be an appeal to the Court of Appeal on questions of fact and of law. In those two instances, the Government at present say that the appeal should be on questions of law only. The hon. Member for Harborough assumed, and it is perhaps natural for a layman to do so, though I assure him that his assumption is wrong, that it is always easy to determine whether a question is one of fact or of law, or of mixed fact and law. The fact that that will often remain quite uncertain will not prevent parties going to the Court of Appeal, even under Clause 13, though it may ultimately be decided against them that the questions involved are questions of fact, because that will not be clear to them in advance.
Let me draw the attention of the Solicitor-General to this point: If he will look at Clause 13 he will find that under the extremely important proviso to subsection (2) we have an almost perfect example of a case where there may be a dispute as to whether the matter is one of fact or law or whether it is a question of mixed fact and law. The proviso deals with the case where
the arbitration tribunal are satisfied of the matters aforesaid but are also satisfied that the making or variation of the agreement was a proper transaction made in the ordinary course of business.
I suggest that it would be very difficult even for a lawyer to find a provision which would be more likely to involve questions both of fact and of law and of mixed fact and law, and I suggest further that, very few appeals will be shut out by the persons having no hope that the matter might be considered one of law.
Therefore, there will be, if the Government resist our Amendment, no likelihood that it will prevent there being appeals under Clause 13 even where the question is ultimately held to be a question of fact, because it will be arguable that it is also a question of law. No actual litigation will be avoided. All that will happen is this: I do not know how many contracts the Government assume these provisions under Clause 13 will affect, but I gathered from the Minister of Supply the other night that he does not think there will be very many. The people who have entered into these few contracts which are frustrated will have a sense of grievance which is wholly unnecessary. The Government will have no sufficient compensation in any advantage either to themselves or to the public for refusing the Amendment.

Mr. Selwyn Lloyd: I only want to say about three sentences with regard to the argument which has been put forward on behalf of the Government. We have seen the Government reduced to some pretty sorry straits, so far as their arguments have been concerned, but my opinion is that the Debate to which we have just listened is about the "all-time lowest" in regard to Government arguments. There have been three arguments put forward. The first one was from the hon. Member for Harborough (Mr. Attewell), who said that the object of those who moved the Amendment was that we were anxious to get more work for the legal profession.

Mr. Attewell: The hon. and learned Member should not take a flippant remark quite as seriously as that.

Mr. Selwyn Lloyd: If I might pay a flippant remark the courtesy of a serious reply, it would be to say that the number of complicated and obscure Bills which this Government have put upon the Statute Book will provide all the work for all the lawyers that this country can conceivably raise for many years. There is nothing in that argument.
The second point, by the Solicitor-General, was that the people were very anxious to get these matters settled and that it would be doing them a disservice to give them a right of appeal on questions of fact. The people who may be affected by the provisions of this Clause are those who have had their property

or rights filched away from them by the Bill. They are not the ordinary parties to proceedings. They may have suffered very severe damage. They may have had their whole livelihood ruined by the Corporation's clawing back certain rights which it says are essential to it. This is not a case of ordinary proceedings in a court of law. These people ought, as a matter of justice, to have a right of appeal on questions of fact.
The other argument which the Solicitor-General used seemed to be the most extraordinary of all. He said that the reason the Government had given the appeal on questions of fact to directors and other people under other Clauses was that they might be under very heavy liabilities. Therefore, when the liabilities might be very heavy and when very rich people are concerned, we give an appeal on questions of law and fact, but if only very small men, or persons who may not be called upon to pay very large sums of money, are concerned, we do not give an appeal on questions of law and fact. I should be very surprised if the hon. Member for Nelson and Colne (Mr. S. Silverman) permitted his judgment on this matter to be decided purely by a question of quantity. Apparently, if there is a large quantity we give these rights but if there is only a small one we do not. That seems to be wholly contrary to the principle of British justice by which we say that what is done has to be done in a proper manner, whether a large sum or a small sum is involved and it is a most extraordinary argument to come in this House from a Law Officer of the Crown.

Mr. Turner-Samuels: I should like to say a few words about this matter. I have been listening with considerable interest to Bar colleagues of mine discussing arbitration. With due respect to all of them, it has seemed to me that they have placed their arguments on this occasion on an entirely fallacious basis. What is the complaint they have? The complaint is partly that in two cases, under Clause 13 and under Clause 23, the person concerned is being, deprived of a right to go to appeal on the facts. They have put the case forward as though every arbitration of a voluntary nature was one in which there was a right of appeal on the facts.

Mr. H. Strauss: No.

Mr. Turner-Samuels: In point of truth. the very contrary is the case. In the ordinary arbitration held by the voluntary choice of the parties, there is ordinarily no appeal on fact at all. If there is a substantial case, there can be an appeal on law. What happens here? What the Government are doing seems eminently reasonable. Clause 44 states when there may be an appeal, and it does that because we have exceptional circumstances here. Consequences may occur which impose very heavy liabilities on the persons concerned, and the Government have gone out of their way, contrary to the ordinary user of arbitration proceedings, to give the facilities and the right in these cases for the parties to appeal on questions of fact.
What it says in particular is that in regard to Clauses 13 and 23 there should not be that right of appeal. Why? Clause 13 refers to the disclaimer of leases and agreements, and it refers only to those cases where they are held to be not reasonably necessary for the purposes of the business. Are not business men, on a tribunal, with a presiding barrister capable of deciding matters of fact as to whether the disclaimer of the lease or the making of the agreement has been reasonably necessary for the purpose of the business? Why there should be a right of appeal on facts contrary to the established practice in these proceedings, I cannot see. On the second point, where it is a question whether there has been an unreasonable lack of prudence, the same argument applies to a case of that kind.
Clause 23 deals with the case where there has been a transfer of rights which is not in the public interest. That is a matter the test of which is decided in the first place by the Minister. It seems to me that he is the only person who, primarily, can decide that, but secondly in that case there is a right to compensation. Apart from that, the matter may go to the arbitration tribunal who will also decide whether the Minister is right and that the transfer of these rights has not been in the public interest. That and the right to compensation are second cases where there ought not to be an appeal on fact. The Government have made an unusual concession here in allowing an appeal on fact at all. Arbitrations were introduced, and are invariably

used, in order to get a rapid and final decision, and what is the case there should be the case here.

Mr. Harold Macmillan: I am rather unwilling as a layman to rush in where lawyers have trodden so wide afield but I must say that my hon. Friends are very disturbed and disappointed that the Solicitor-General has not been willing to accept this comparatively small change. Hon. and learned Gentlemen have maintained that to allow an appeal at all is contrary to the practice of arbitration but this is not a voluntary arbitration between two litigants who, having made a contract, have fallen out as to its interpretation.

Mr. Turner-Samuels: That is exactly what applies to voluntary arbitration. Why make a difference here?

Mr. Macmillan: I am trying to show. The so-called litigants before this arbitration are not people who have voluntarily come to arbitration to settle some legal difference arising out of contracts they have entered into voluntarily. This arises because the Government in their wisdom have decided to nationalise the iron and steel trade. It is not fair to compare this with arbitration used by agreement by both parties to settle a dispute arising between them.
7.15 p.m.
There appear to be only two cases where an appeal on fact is not to be allowed and I still hope that on reconsideration this concession may be given in another place. In the long run it would probably save time and money because I can imagine many cases in which there would be an appeal as to whether it was a question of law or a question of fact. Considering that the matters under Clause 13 are rather important—they involve every contract entered into since October, 1947, which is the date of some great ministerial pronouncement on this matter and they involve the personal liability of a large number of third parties—I hope that the matter may still be further considered. There are many other questions still to come before us in the remaining two or three hours before the end of this procedure and we did not really wish to press this but if we cannot get a concession we must at least register our opinion in the Lobby.

Question put, "That the words 'on a claim' stand part of the Bill."

The House divided: Ayes, 290; Noes, 140.

Division No. 123.]
AYES
[7.17 p.m.


Adams, Richard (Balham)
Follick, M
Macpherson, T. (Romford)


Albu, A. H.
Foot, M. M.
Mainwaring, W. H.


Allen, A. C. (Bosworth)
Forman, J. C.
Mallalieu, J. P. W. (Huddersfield)


Alpass, J. H.
Fraser, T. (Hamilton)
Mann, Mrs. J.


Anderson, A. (Motherwell)
Freeman, J. (Watford)
Manning, C. (Camberwell, N.)


Attewell, H. C.
Gaitskell, Rt. Hon. H. T. N
Manning, Mrs. L. (Epping)


Austin, H. Lewis
Ganley, Mrs. C. S.
Mathers, Rt. Hon. George


Awbery, S. S.
Gibbins, J
Medland, H. M


Ayles, W. H.
Gibson, C. W.
Mellish, R. J.


Ayrton Gould, Mrs. B.
Glizean, A.
Middleton, Mrs. L


Bacon, Miss A.
Glanville, J. E. (Connect)
Mikardo, Ian


Balfour, A.
Gooch, E. G.
Mitchison, G. R


Barnes, Rt. Hon. A. J.
Goodrich, H. E.
Moody, A. S.


Barstow, P. G
Grenfell, D. R
Morgan, Dr. H. B.


Barton, C.
Grey, C. F.
Morris, P. (Swansea, W.)


Battley, J. R.
Grierson, E.
Mort, D. L.


Bechervaise, A. E.
Griffiths, D. (Rother Valley)
Murray, J. D.


Benson., G.
Griffiths, W. D. (Moss Side)
Naylor, T. E.


Beswick, F.
Guest, Dr L. Haden
Neal, H. (Claycross)


Bing, G. H. C
Gunter, R J
Nichol, Mrs. M. E. (Bradford, N.)


Binns, J.
Guy, W. H.
Nicholls, H. R. (Stratford)


Blackburn, A. R.
Hale, Leslie
Noel-Baker, Capt. F. E. (Brantford)


Blenkinsop, A.
Hall, Rt. Hon. Glenvil
O'Brien, T.


Boardman, H.
Hamilton, Lieut.-Col. R.
Oldfield, W. H


Bottomley, A. G.
Hannan, W. (Maryhill)
Oliver, G. H


Bowden, Flg. Offr. H. W.
Hardman, D. R.
Orbach, M.


Braddock, Mrs. E. M. (L'pt. Exch'ge)
Hardy., E. A.
Paling, Rt. Hon. Wilfred (Wentworth)


Braddock, T. (Mitcham)
Harrison, J.
Paling, Will T. (Dewsbury)


Bramall, E. A.
Hastings, Dr. Somerville
Palmer, A. M. F


Brook, D. (Halifax)
Haworth, J.
Pargiter, G. A


Brooks, T. J. (Rothwell)
Henderson, Rt. Hon. A. (Kingswinford)
Parker, J.


Broughton, Dr. A. D. D.
Henderson, Joseph (Ardwick)
Parkin, B. T.


Brown, George (Belper)
Hicks, G.
Paton, Mrs. F. (Rushcliffe)


Brown, T. J. (Ince)
Holman, P.
Paton, J. (Norwich)


Bruce, Maj. D. W. T
Holmes, H. E. (Hemsworth)
Pearson, A.


Burke, W. A.
Horabin, T L
Perrins, W.


Callaghan, James
Hoy, J.
Popplewell, E.


Carmichael, James
Hubbard, T.
Porter, E. (Warrington)


Castle, Mrs. B. A.
Hudson, J. H (Ealing, W)
Porter, G. (Leeds)


Chetwynd, G. R.
Hughes, Emrys (S. Ayr)
Price, M. Philips


Cluse, W S.
Hughes, H. D. (W'lverh'pton, W.)
Pritt, D. N.


Cobb, F. A.
Hynd, H. (Hackney, C.)
Proctor, W. T


Cocks, F. S.
Hynd, J. B. (Attercliffe)
Pryde, D. J.


Collick, P.
Irvine, A. J. (Liverpool)
Pursey, Comdr. H


Collins, V. J.
Isaacs, Rt. Hon. G. A.
Randall, H. E.


Colman, Miss G. M.
Janner, B.
Ranger, J.


Comyns, Dr. L.
John, W.
Rankin, J.


Corbet, Mrs. F. K. (Camb'well, N.W.)
Johnston, Douglas
Rees-Williams, D. R


Corlett, Dr. J.
Jones, D. T. (Hartlepool)
Reeves, J.


Cove, W. G.
Jones, Elwyn (Plaistow)
Reid, T. (Swindon)


Crawley, A.
Jones, Jack (Bolton)
Rhodes, H.


Crossman, R. H. S.
Jones, P. Asterley (Hitchin)
Ridealgh, Mrs. M.


Cullen, Mrs.
Kenyon, C.
Roberts, Goronwy (Caernarvenshire)


Dagger, G.
Kinghorn, Sqn.-Ldr. E
Robertson, J. J. (.Berwick)


Davies, Edward (Burslem)
Kinley, J.
Robinson, K. (St. Pancras)


Davies, Harold (Leek)
Kirby, B. V.
Rogers, G. H. R.


Davies, Haydn (St. Pancras, S.W.)
Kirkwood, Rt. Hon, D.
Ross, William (Kilmarnock)


Davies, R. J. (Westhoughton)
Lang, G.
Royle, C.


Davies, S. O. (Merthyr)
Lavers, S.
Sargood, R.


Deer, G.
Lawson, Rt. Hon. J. J
Scollan, T.


de Freitas, Geoffrey
Lee, Miss J. (Cannock)
Scott-Elliot, W


Diamond, J.
Leonard, W
Segal, Dr, [...]


Dobbie, W.
Leslie, J. R.
Shackleton, E. A A


Donovan, T.
Levy, B. W.
Sharp, Granville


Driberg, T. E. N.
Lewis, A. W. J. (Upton)
Shawcross, Rt. Hn. Sir H. (St. Helens)


Dugdale, J. (W. Bromwich)
Lewis, J. (Bolton)
Shurmer, P.


Ede, Rt. Hon. J. C.
Lewis, T. (Southampton)
Silkin, Rt. Hon. L.


Edwards, Rt. Hon. Sir C. (Bedwellty)
Lipton, Lt.-Col. M.
Silverman, J. (Erdington)


Edwards, John (Blackburn)
Logan, D. G.
Silverman, S. S. (Nelson)


Edwards, Rt. Hon. N. (Caerphilly
Lyne, A. W.
Simmons, C. J.


Edwards, W. J. (Whitechapel)
McAdam, W.
Skeffington, A. M


Evans, E. (Lowestoft)
McAllister, G.
Skeffington-Lodge, T C


Evans, John (Ogmore)
McGhee, H. G
Skinnard, F. W.


Evans, S. N (Wednesbury)
Mack, J. D.
Smith, C. (Colchester)


Ewart, R.
McKay, J. (Wallsend)
Smith, Ellis (Stoke)


Fairhurst, F.
Mackay, R. W. G. (Hull, N.W.)
Smith, H. N. (Nottingham, S.)


Farthing, W. J
McKinley, A. S.
Smith, S. H. (Hull, S.W.)


Field, Capt. W. J
McLeavy, F.
Snow, J. W.


Fletcher, E. G. M. (Islington, E.)
MacPherson, Malcolm (Stirling)
Solley, L. J.




Sorensen, R. W
Timmons, J.
Wilkes, L.


Soskice, Rt. Hon. Sir Frank
Turner-Samuels, M.
Willey, O. G. (Cleveland)


Sparks, J. A.
Ungoed-Thomas, L.
Williams, D. J. (Neath)


Steele, T.
Usborne, Henry
Williams, J. L. (Kelvingrove)


Stokes, R. R.
Vernon, Maj. W. F.
Williams, Ronald (Wigan)


Strachey, Rt. Hon. J.
Viant, S. P.
Williams, Rt. Hon. T. (Don Valley)


Strauss, Rt. Hon. G. R (Lambeth)
Walker, G. H.
Williams, W. R (Heston)


Stross, Dr. B.
Wallace, G. D. (Chislehurst)
Willis, E.


Swingler, S.
Wallace, H. W. (Walthamstow, E.)
Wise, Major F. J.


Sylvester, G. O.
Warbey, W. N
Woodburn, Rt. Hon. A


Symonds, A. L.
Watkins, T. E.
Wyatt, W.


Taylor, H. B. (Mansfield)
Webb, M. (Bradford, C
Yates, V. F


Taylor, R. J. (Morpeth)
Weitzman, D.
Young, Sir R. (Newton)


Taylor, Dr. S. (Barnet)
Wells, P. L. (Faversham)
Younger, Hon. Kenneth


Thomas, D. E. (Aberdare)
West, D. G.
Zilliacus, K.


Thomas, George (Cardiff)
Wheatley, Rt. Hn. J. T. (Edinb'gh, E.)



Thomas, I. O. (Wrekin)
White, H. (Derbyshire, N.E.)
TELLERS FOR THE AYES:


Thomas, John R. (Dover)
Whiteley, Rt. Hon. W.
Mr. Collindridge and Mr. Wilkins.


Thurtle, Ernest
Wigg, George





NOES


Agnew, Cmdr. P. G.
Henderson, John (Cathcart)
Odey, G. W.


Amory, D. Heathcoat
Hinchingbrooke, Viscount
Orr-Ewing, I. L.


Baldwin, A. E
Hogg, Hon. Q.
Peto, Brig. C. H. M


Barlow, Sir J.
Hollis, M. C.
Pickthorn, K.


Beamish, Maj. T. V. H
Hope, Lord J.
Poole, O. B. S. (Oswestry)


Bennett, Sir P.
Howard, Hon. A.
Price-White, Lt.-Col. D


Birch, Nigel
Hudson, Rt. Hon. R. S. (Southport)
Prior-Palmer, Brig. O


Boothby, R.
Hulbert, Wing-Cdr. N. J.
Raikes, H. V.


Bower, N.
Hurd, A.
Rayner, Brig. R.


Boyd-Carpenter, J. A.
Hutchison, Lt.-Cm. Clark (E'b'rgh W.)
Reed, Sir S. (Aylesbury)


Braithwaite, Lt.-Comdr. J. G.
Hutchison, Col. J. R. (Glasgow, C.)
Renton, D.


Bromley-Davenport, Lt.-Col. W
Jeffreys, General Sir G.
Roberts, Emrys (Merioneth)


Buchan-Hepburn, P. G. T.
Keeling, E. H.
Roberts, H. (Handsworth)


Bullock, Capt. M.
Lambert, Hon. G.
Robinson, Roland (Blackpool, S.)


Butcher, H. W.
Lancaster., Col. C. G
Ropner, Col. L.


Butler, Rt. Hn. R. A. (S'ffr'n W'ld'n)
Langford-Holt, J.
Scott, Lord W.


Byers, Frank
Legge-Bourke, Maj. E. A. H
Shepherd, S. (Newark)


Carson, E.
Lindsay, M. (Solihull)
Smith, E. P. (Ashford)


Challen, C
Linstead, H. N.
Snadden, W. M.


Clarke, Col. R. S.
Lloyd, Selwyn (Wirral)
Spearman, A. C. M


Clifton-Brown., Lt.-Col. G.
Low, A. R. W.
Stanley, Rt. Hon. O.


Corbett, Lieut.-Col. U. (Ludlow)
Lucas, Major Sir J.
Stoddart-Scott, Col. M.


Crosthwaite-Eyre, Col. O. E.
Lucas-Tooth, S. H.
Strauss, Henry (English Universities)


Cuthbert, W. N.
MacAndrew, Col. Sir C.
Studholme, H. G


Darling, Sir W. Y.
McCallum, Maj. D.
Sutcliffe, H.


De la Bere, R.
McCorquodaie, Rt. Hon. M. S.
Taylor, C. S. (Eastbourne)


Digby, Simon Wingfield
McFarlane, C. S.
Taylor, Vice-Adm. E. A. (P'dd't'n, S.)


Dodds-Parker, A. D.
Mackeson, Brig. H. R.
Thomas, Ivor (Keighley)


Dower, Col A. V. G. (Penrith)
McKie, J. H. (Galloway)
Thorneycroft, G. E. P. (Monmouth)


Drayson, G. B.
Maclay, Hon. J. S.
Thornton-Kemsley, C. N.


Drewe, C.
MacLeod, J.
Thorp, Brigadier R. A. F


Dugdale, Maj. Sir T. (Richmond)
Macmillan, Rt. Ham Harold (Bromley)
Turton, R. H.


Eccles, D. M.
Macpherson, N. (Dumfries)
Tweedsmuir, Lady


Elliot, Lieut.-Col. Rt. Hon. Walter
Maitland, Comdr. J. W.
Vane, W. M. F


Fletcher, W. (Bury)
Manningham-Buller, R. E
Walker-Smith, D


Foster, J. G. (Northwich)
Marlowe, A. A. H.
Ward, Hon. G. R.


Fraser, Sir I. (Lonsdale)
Marsden, Capt. A.
Webbe, Sir H. (Abbey)


Galbraith, Cmdr. T. D. (Pollok)
Marshall, D. (Bodmin)
White, Sir D. (Fareham)


Galbraith, T. G. D. (Hillhead)
Marshall, S. H. (Sutton)
White, J. B. (Canterbury)


Gammans, L. D.
Maude, J. C.
Williams, Gerald (Tonbridge)


George, Maj. Rt. Hn. G. Lloyd (P'ke)
Mellor, Sir J.
Willoughby de Eresby, Lord


George, Lady M. Lloyd (Anglesey)
Molson, A. H. E.
Winterton, Rt. Hon. Earl


Gomme-Duncan, Col. A
Morris, Hopkin (Carmarthen)
York, C.


Gridley, Sir A.
Morrison, Maj. J. G. (Salisbury)
Young, Sir A. S. L. (Partick)


Grimston, R. V.
Mott-Radclyffe, C. E.



Hare, Hon. J. H. (Woodbridge)
Neven-Spence, Sir B.
TELLERS FOR THE NOES:


Harvey, Air-Comdre. A. V.
Nicholson, G.
Major Conant and


Headlam, Lieut.-Col. Rt. Hon. Sir C.
Noble, Comdr. A. H. P
Colonel Wheatley

Mr. Manningham-Buller: I beg to move, in page 49, line 15. to leave out from "eighteen," to "section," in line 16.
This Amendment raises a somewhat different point. The House will see on looking at lines 14 and 15 of page 49 of the Bill that the right of appeal on a question of fact is limited first of all to

a claim under Clause 18 against the directors of a company and, secondly, to an application under Clauses 22, 24 or 25 in respect of any transaction. The effect of this Amendment is twofold. First, it widens the scope of an appeal on a question of fact under Clause 18 to cover any claim which comes within that Clause, whether or not it is against


a director. I think it does that, but if it does not widen it, then the words "against the directors of a company" are unnecessary.
The real substance of this Amendment arises not with regard to Clause 18 but with regard to Clause 25. The right hon. Gentleman will appreciate that this subsection (3) gives an appeal on a question of fact only where there is an application under Clause 25 of the Act in respect of any transaction. If the right hon. Gentleman will turn back to Clause 25, he will see that it deals not only with applications in respect of any transaction but also with claims. If he will look at subsection (5) of that Clause he will see that where an application is made to the tribunal in respect of any transaction, and the application is determined in favour of the Corporation, the tribunal shall have exclusive jurisdiction to determine any claims outstanding in respect of the transaction. I think it must be by an oversight that, where it determines claims outstanding in respect of the transaction, the person affected by that determination is excluded under subsection (3) from any right of appeal on a question of fact.
It seems quite illogical that that should be so. The substance of the Amendment is to provide that in respect not only of major transactions, but also of outstanding claims in respect of a transaction, there should be an appeal on fact as well as on law. I hope I have made the point clear to the right hon. and learned Gentleman, although it is somewhat complicated.
7.30 p.m.
During the Committee stage the Solicitor-General for Scotland said:
I can give the right hon. Gentleman the assurance he asks for. 'Exclusive' refers exclusively to courts of first instance, and express provision is made by Clause 42
as it then was—
for an appeal on questions of law or fact under Clause 24."—[OFFICIAL REPORT, Standing Committee C, 17th February, 1949; c. 1078.]
In my opinion the hon. and learned Gentleman was wrong in that no right of appeal on fact is given in respect of claims under Clause 25. This is rather more than a matter of drafting, and I suggest that it is necessary to make the Amendment in order to give affect to the statement of the Solicitor-General for

Scotland and also in the interests of justice.

Mr. J. Foster: I beg to second the Amendment.
The Clause, without the Amendment, provides that there shall be an appeal on fact in respect of claims under Clause 18 and applications under Clauses 24 and 25. The very fact that the words "claim" and "application" are so contrasted must, I think, mean that under Clause 25 claims do not have the right to an appeal on fact, and that if applications were made under Clause 18 they also would be excluded. I do not think that can have been the intention of the Government, because it would result in an injustice and would be contrary to the assurance given by the Solicitor-General for Scotland. He was evidently under the impression—and so, I think, was the hon. and learned Member for Kettering (Mr. Mitchison)—that Clause 44 allowed for appeals on law and fact in respect of claims under Clause 25.
On referring to the OFFICIAL REPORT of the Proceedings upstairs, I certainly got the impression that both the Solicitor-General for Scotland and the hon. and learned Gentleman were under the impression that all questions arising under Clause 25 were susceptible to appeals on law and fact. If that is so, it may well be that the Government will agree with the Amendment and will agree to remedy what looks, on the face of it, to be an injustice and in no sense a party or specious point.

The Solicitor-General: I follow entirely the reasoning of the hon. and learned Gentleman the Member for Daventry (Mr. Manningham-Buller) and the hon. Member for Northwich (Mr. J. Foster). Although we will certainly consider what they have said, and see whether the view I am about to express is right or wrong, they have not satisfied me that there is a mistake in the drafting. I will explain why. Clause 18 speaks of the initiation of claims. If hon. Members will look at subsection 6 of that Clause, they will see that it speaks of
Any claim under this section against the directors.…
The words "against the directors" are not necessary, I agree, but their presence does no harm; it does not shut out any thing which would otherwise be included.


Then, on looking at Clause 25, one sees that under subsection (2) the matter comes before the court in the guise of an application. Clause 25 (5) reads as follows:
Where an application is made to the arbitration tribunal under this section…the tribunal shall have exclusive jurisdiction to determine any claims outstanding in respect of the transaction.
Therefore, the claims are brought before the Arbitration Tribunal, as it were, in the train of the application. I should have thought, therefore, that the right way to reflect that in the wording of Clause 44 (3) was to choose the wording which has been adopted.
When talking about Clause 18 we are talking about a proceeding which comes before the tribunal in the form of a claim. It is so described in that Clause. When talking of Clause 25, we are speaking of proceedings which come in the guise of an application, because it is so described in Clause 25. The claim arises as something which is incidental to the application. The words used are:
on a claim…or on an application.…
I should have thought, as a matter of drafting, having regard to the form of Clause 25, that that would cover claims which arose incidentally to an application which was made to the tribunal under that Clause. That, I submit, is the effect of the wording which is used. We see the point which has been made, however, and I follow the reasoning which has been put forward, and we will look again to see whether the wording is, in fact, appropriate.

Mr. Manningham-Buller: I am sure the House is grateful to the right hon. and learned Gentleman for what he has said. Quite frankly, I am not convinced at all by his argument. I think the matter ought to be put beyond any doubt whatsoever, particularly as it will be possible to found an argument on Clause 25 (5) that the effect of the words "exclusive jurisdiction," coupled with the word "application" in subsection (3), would be to exclude any appeal on such claims to the tribunal. Obviously, however, there is no division between the two sides of the House about what is intended to be achieved by Clause 43 (3). I think the matter should be put beyond any shadow of doubt and I hope, therefore, that when the right hon. and learned

Gentleman reconsiders it, an Amendment will be tabled to make it absolutely clear. In view of what he has said—and I am grateful to him for that—I beg to ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Mr. Selwyn Lloyd: I beg to move, in page 49, line 19, to leave out subsection (4).
I can deal with the Amendment very briefly, because only a fairly small point is involved. I am not sure whether the right hon. and learned Gentleman is prepared to look favourably upon it. If subsection (4) remains in the Clause, the Minister has a statutory right to be heard in all proceedings before the Arbitration Tribunal. No one will quarrel with the Minister's coming before the Arbitration Tribunal in an appropriate case when the tribunal considers that it will be helped by the representation of the Minister; but that he should have the statutory right to appear adds an unnecessary person to the proceedings. After all, the Corporation will always be there and will always be represented as a party to the proceedings. In those circumstances, we prefer to have subsection (4) eliminated.

Lieut.-Commander Braithwaite: I beg to second the Amendment.
Unlike my hon. and learned Friend the Member for Wirral (Mr. Selwyn Lloyd) I was not a member of the Standing Committee, but I have read the proceedings and I hope the Government will have had second thoughts on this matter since then. In resisting the very forceful arguments in favour of this Amendment, the right hon. and learned Gentleman did not show his usual enthusiasm. I hope that tonight we may have a favourable answer from the Government.

The Solicitor-General: We have also carefully re-read the arguments used during the Committee stage and have rethought over all the considerations. Although we still think it would possibly be desirable that this power should be retained, we are prepared to accept the Amendment.

Mr. H. Macmillan: In this interlude of happy and agreeable position before the final Guillotine falls upon us, may I thank the right hon. and learned Gentleman for his kindness?

Amendment agreed to.

Clause 49.—(CONSTITUTION AND PRO- CEEDINGS OF PUBLICLY-OWNED COM- PANIES.)

Amendment made: In page 51, line 46, after "companies" insert:
and of the other companies (to be shown separately) which are for the time being subsidiaries of the Corporation."—[Mr. G. R. Strauss.]

Clause 51.—(DUTY TO FURNISH INFORMATION.)

Mr. H. Macmillan: I beg to move, in page 52, line 20, to leave out from "rights," to the end of line 22.
The object of this Amendment is simple. It is to limit the classes of people who are under a statutory obligation to provide information under the Bill. The Minister, throughout the Bill, seems much more willing to obtain information than to give it. In this Clause he takes the right to demand from certain classes of people such information as he says is necessary to him. It may be remembered that in the Debates in Committee we moved a prior Amendment to this and the Minister declared that it was necessary in that case to have this right in order to retrieve some patent or licence from some third party which may have been granted, or to retrieve the control of some factory, or something of that kind which had passed out of possession. We accepted that and did not press the Amendment and have not placed that Amendment on the Order Paper again.
We then came to this Amendment, dealing with another class of person, but in Committee it was guillotined after a very short discussion, in which the Minister scarcely had time to make a reply. Between these various axes we oscillate with great difficulty. Sometimes they fall at one place and sometimes at another. This Amendment deals with the case in which the Minister declared he must have the power of obtaining all the returns necessary to show what quantities of products were being made by the licensed undertakers. He said he required this to assure himself that they were keeping within the limits laid down in the licence and that that was the sole reason for this provision.
On reconsideration, I do not think he will find that is quite accurate, unless I am misinformed. I think he has the power in any case to get all reasonable information he can want about licensed

undertakers under Clause 30 (2). I wonder what additional power he wants. He can get the power to secure that the quantities and various conditions under the licences are observed under the licensing Clause; therefore, why is it necessary to do so under this separate power? The reasons he gave as overriding do not seem to be necessary, as Clause 30 subsection (2) is now drawn.

7.45 p.m.

Mr. G. R. Strauss: I hope I can easily satisfy the right hon. Gentleman. This is necessary to ensure that everybody who ought to have a licence has in fact applied for a licence. Otherwise, there is no means of checking whether someone who is producing Second Schedule products in substantial quantities is or is not doing so and should or should not have a licence. We may want to know whether someone is producing 3,000 tons or 8,000 tons of a rolled product or alloy metal and, unless we can ask what is the output of a firm who, as we suspect or think, may be exceeding the limit of 5,000 tons, we have no means of checking it. It is true that under Clause 30 we have power to get information from anyone who has a licence, but that does not enable us to get information from anyone who has not a licence. The Minister must have power to seek information where necessary. I hope that explanation satisfies the right hon. Gentleman.

Mr. H. Macmillan: It does, and it does not. The right hon. Gentleman talks of a licence as though it were a dog licence, or a radio licence, and as if people produced 10,000 tons of steel in the dark, without anyone knowing. One cannot produce tons of steel in a hack room. The Minister talks of a licence as though it were something one can get at the post office for ten bob. The Minister can ask why they are operating at all, and all this information can be obtained. However, we have other points to raise and I will look at this matter again, as it can certainly be raised later on. In the circumstances, I beg to ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Mr. Manningham-Buller: I beg to move, in page 52, line 30, to leave out "or the Corporation."
The curious part of this Clause is that not only can the Minister require the information, or that the information be


given to any person authorised by the Minister, but the information is unlimited, and may not only be information reasonably required by the Minister, but also reasonably required by the Corporation. Why should those words be there? Why should this be extended to the Corporation? If the Corporation had occasion for making inquiries to obtain this information, I should have thought the right course would be for them to apply to the Minister. In Committee, my right hon. Friend the Member for North Leeds (Mr. Peake) asked:
Is it clear that under the Clause the Corporation will not have any power to demand information from the licensed firms?
The Minister replied:
I suppose it could do so if it showed that it needed it for its own purposes, but I do not think it will have any interest in it"—[OFFICIAL REPORT, Standing Committee C, 10th March, 1949; c. 1563.]
If it will have no interest in it there can be no conceivable purpose for the retention of these words "or the Corporation" in line 30. I suggest to the right hon. Gentleman that the language of this Bill would be much improved and the meaning would be much clearer if he accepted this Amendment.

Lieut.-Commander Braithwaite: I beg to second the Amendment.

Mr. G. R. Strauss: There are certain conditions under which it may be very desirable for the Minister to be able to obtain information required by the Corporation. I would first point out that the information can only be obtained through the Minister; the Corporation cannot go along and ask for information. If the Corporation desires some information which it cannot get and which it ought to have, and can persuade the Minister that it should have it, the Minister can ask for the information. The circumstances which we have in mind are—I admit they are rather remote but they are possible—that it may well be that between the passage of this Bill and the vesting date, the Corporation having been established, it may become very desirable in the eyes of the Corporation that it should get certain information from the companies which it is to take over—financial information, production information, information about the personnel of their management, etc., to enable them to get down to their job quickly and properly after vesting day.
It is conceivable that there may be, among the companies which are to be taken over, some which dislike the idea of nationalisation, and which might be reluctant or definitely unwilling to give that information, which would be unreasonable. That might create a considerable nuisance for the Corporation. I hope that the hon. and learned Member will agree that in those circumstances it would be reasonable for the Minister, having being persuaded by the Corporation that the information is really required by it so that it can prepare its plans properly, to ask the firm concerned for that information, and then pass it on to the Corporation. I agree that it will probably not happen, but those are the only conditions.

Mr. Manningham-Buller: If those were the conditions, would the Minister not say that that information was "reasonably…required by the Minister "?

Mr. Strauss: The Minister would really not want it for any Ministerial purpose. We should not want to know details about the personnel of these companies, for example. It would be of no direct interest to us; it would be of interest and of value only to the Corporation. It would only be the Minister who would be able to seek this information if the Corporation made out a case. For those reasons, I hope that on reflection the hon. and learned Member will agree that there might be occasion when this power could be and would have to be used.

Mr. Manningham-Buller: The right hon. Gentleman has, from what he has said, convinced me that the retention of these words "or the Corporation" is really unnecessary because the very instance which he gave would to my mind quite clearly establish a case coming within the earlier words "reasonably…required by the Minister." The Minister would have reasonable grounds for acquiring that information for the purpose of enabling the Corporation to do its job. On the other hand, I should have thought it was quite clear that the words which we seek by this Amendment to delete are entirely unnecessary. I should like to ask the Minister to give further consideration to the matter.

Viscount Hinchingbrooke: This borders upon the situation in which the Corporation is empowered to extract


information from companies which are completely outside the Second Schedule, and to use that information to hamper their activities. Some of us said yesterday that we thought that the Government ought to be in the position of aiding the small man against the big concern. It is because I, for one, take that view that I wish to ensure that the right to extract this information from all these multifarious bodies, companies and organisations completely outside the Second Schedule, should vest in the Minister alone, and we would hope that he would act to some extent as a safeguard. I am not sure that I have much confidence in the right hon. Gentleman in that respect, because so far in our consideration of this Bill he has given every indication of wishing to put the Corporation into the position of an octopus which will swallow up all these small firms and render their opposition completely nugatory and completely ineffective. But one day we may have a Minister of Supply who may take a contrary view and say that these small companies ought to be aided in their work, and that, if anything, restrictions should be put upon the giant monopoly organisation.
In view of that possibility, the Corporation should be taken out of any context in which it would be possible for information to be extracted from all these small firms and furnished to the Corporation. I would say, let the Minister, if he so desires, for one reason or another—perhaps in the national interest, perhaps not—have access to that information. We failed just now to stop the Minister getting information about companies completely outside the Third Schedule. If he is to be given this information, let him and not the Corporation have it; let him be the sieve through which the knowledge goes to the Corporation.

Mr. G. R. Strauss: The noble Lord cannot have read the Clause very carefully because that is exactly what happens under it.

Amendment negatived.

Clause 54.—(PROVISIONS AS TO PROSE- CUTIONS AND AS TO OFFENCES BY CORPORATIONS.)

The Solicitor-General: I beg to move, in page 53, line 39, to leave out "the Minister or by."
This Amendment gives effect to proposals made by hon. Gentlemen opposite

during the Committee stage, and puts it in the power of the Director of Public Prosecutions and not in the power of the Minister to institute prosecutions. As the Clause stands, either could consent to or authorise the institution of proceedings. We are now excluding the Minister and vesting that function solely in the Director of Public Prosecutions.

Amendment agreed to.

Mr. Lyttelton: I beg to move, in page 54, line 1, to leave out from "corporate," to the end of line 10, and to insert:
and is proved to have been committed with the consent or connivance of, or to be attributable to any negligence on the part of, any director, general manager, secretary or other similar officer of the body corporate he, as well as the body corporate, shall be liable to be proceeded against and punished accordingly.
The object of this Amendment is to shift the onus of proof to establish the guilt of a person from the person concerned and to make it unnecessary for that person to prove his innocence. Similar Amendments have been rejected in the case of other nationalisation Measures. The Government have maintained the attitude that in certain cases in connection with other Measures it is necessary for the person to prove his innocence and have accordingly retained the provision. Where those Amendments have been resisted in the past, and where the persons concerned have to prove their innocence, there is a presumption from the nature of the case that the person in question is guilty, but in this particular case there is no such presumption, because it deals with such matters as the giving of false information by a company.
8.0 p.m.
If a company gives false information, it is probable that it was given by some official or other, and, therefore, there is no presumption that the other officials or directors of the company knew that the information was false. Yet under this Clause it is necessary for all the directors or officials concerned to prove their innocence. This seems to be carrying the principle, of which I am not very enamoured in any case, much too far. It is one thing to say that if an individual is required to do something and has not done it, he has got to prove the reasons which led him to refuse to take that action, but when we get into the realm


of corporate bodies and make it necessary for all the officials and the directors to prove their innocence it seems to me to be carrying what is not a very agreeable principle into the area where it becomes positively vicious.

The Solicitor-General: This is a controversial matter which has been very frequently discussed before, and indeed has arisen on the occasion of a number of Measures which have been passed by this Parliament, and I have defended the Clause in the form in which it stands at present. The defence that I put forward is that the director, under the terms of the Clause, is put in this position: if the prosecution establish in the first place, the onus being on them to do so, that a corporation or a company has committed an offence against this Measure, the director then is responsible unless he can show, the onus being on him to do so, that he did not consent or connive at the offence, and furthermore that, having regard to all the circumstances, he exercised all reasonable diligence to prevent its commission. That is the position in which the director is placed.
The justification for putting the director in that position is this: if an offence has been committed by a corporation, it is quite easy to prove that the corporation has committed it. The evidence is generally to hand. It depends on what the offence is but, generally speaking, the evidence is to hand and the prosecuting authority can go to the court, can employ that evidence and get to the stage of showing that the corporation has committed the offence. But then, unless we have a Clause in this form it is, generally speaking, almost impossible to take the next step, and establish affirmatively any responsibility on the part of the directors if the onus of showing complicity by the directors is left on the prosecution.
Therefore, in considering the Clause one has to take these steps. First, one has to ask oneself whether the directors are criminally responsible if they have been guilty of complicity in the commission of the offence by the corporation. I think all hon. Members would say "yes" at once in answer to that question, on the assumption that there has been complicity. I feel there could be no controversy about that. Then the

controversial question arises whether the onus should be on them to extricate themselves from complicity, or whether it should be upon the prosecution to implicate them.
The reasons which I urge in support of the view that it should be upon the directors to extricate themselves are these. In the first place, it is, in practice, next to impossible to show affirmatively that a director was implicated. The domestic arrangements of the company are within its own knowledge, and it is difficult and, indeed, almost impossible for an extraneous authority to penetrate into the internal arrangements of the company and ascertain the knowledge and procure the evidence to establish affirmatively that a director was involved.
Therefore, unless one has a Clause in this form, generally speaking directors who are morally in every sense of the word guilty in a particular case will escape conviction. That, I believe, is a position, which hon. Members will agree with me, ought not to obtain. If directors are morally guilty they ought to be criminally responsible, as the corporation is. If they are to be made criminally responsible, and if it is to be made possible to prosecute them and establish their guilt, the onus must be taken off the prosecution and placed upon them in certain respects.
Assuming that is right, have we placed upon them an unfair onus? Have we loaded them with too heavy a load and placed upon them a burden of establishing their innocence which they cannot reasonably be expected to shoulder? We feel that we have not. What we have done is to say to the director, "You being a person who, in relation to this company, not only in the eye of the law but in the eye of the business man and in commonsense, has a special responsibility towards it, you being a person who runs its affairs and who cannot fairly or morally wash your hands of its proceedings, you are to be responsible unless you can show in the first place that you did not connive or consent to the commission of the offence." Surely that is reasonable.
One must then go a little further to make the thing effective. A director may perfectly well shut his eyes to the commission of an offence. It might in some circumstances be right in that case to


hold him to be conniving at it, but he might place himself in a position in which he has no knowledge of the commission of the offence. He might absent himself during a particular board meeting, or he might turn a blind eye so that he could truthfully say "I did not know it." If all he has got to say is that he did not connive or consent to the commission of the offence, all he has to do is so to arrange affairs that he does not know about it. That would enable directors over and over again to escape responsibility when they should, in fact, be under the responsibility.
Therefore, we place this further requirement upon directors. We say, not only must he show that he did not consent or connive, but he must also show that, having regard to a commonsense point of view,
…he exercised all such diligence to prevent the commission of the offence as he ought to have exercised having regard to the nature of his functions in that capacity and to all the circumstances.
We say that he must show not only that he did not know but that in all the circumstances, having regard to the factual position that he occupied with regard to that company, having regard to the part which he was recognised as taking in its affairs—because a director may be a person who takes a very slight part in its affairs—and having regard to the position of authority which he occupied in that company, he did what he could to prevent the commission of the offence. That means not that he must have done everything conceivably possible, but that he took all reasonable precautions to see that it did not take place. That is what we have done, and I hope the House will agree, in these circumstances, that we have not been unreasonable, and, what is more important, that we have not been unfair.
I am simply saying that this is not an innovation. Going far back in our legislation, many years before the war, the principle has been accepted that the onus can be put upon the director. This particular form of Clause, which we think much fairer and better than other Clauses which have been used, has been devised in this Parliament, and we think it less onerous on the directors than some Clauses which have previously been used, and we feel that it is fair as it stands. There are many precedents for it, and this Parliament during its existence has

over and over again approved Clauses in this form. Therefore, I submit that having regard to the reasons that there are to justify it in principle, it cannot be said that there is any ground now for departing from a well-established precedent which has now found a place in our law. I accordingly ask the House to reject the Amendment.

Mr. H. Strauss: Are the precedents to which the Solicitor-General alludes precedents where the offence is like that which we find in Clause 53, namely, one of giving information with certain knowledge?

The Solicitor-General: There are a whole variety of offences and a long list of Acts which I have frequently read out, but I do not think the House would wish me to read them out again. There are all sorts of offences up and down these Acts to which the Clause in question is made applicable.

Viscount Hinchingbrooke: I enter the ground on which the Solicitor-General has been treading with very great fear and trepidation, and only very humbly put myself up against the right hon. and learned Gentleman's argument on an issue of this kind. There are one or two things he said which I find very difficult to reconcile with the attitude of the ordinary layman. The Clause, as drafted, contravenes the cherished principle that a man is to be considered innocent until proved guilty. The Solicitor-General says that there are many cases, going back into the past, where the onus has successfully been put on a director to prove his innocence. I should like to have some particulars, because this is news to me. This certainly has not been incorporated, so far as I know, in the Companies Act, and it is not a recognised principle in commercial life. It may be that in the recesses of the statute there are things of this kind, but they are certainly not appreciated by the ordinary man in business.
The Solicitor-General said that a director could quite well put himself into the position of not knowing what was going on, but how can that possibly take place without an accusation being successfully held against him? We had all this argument yesterday in connection with another Clause, that somehow a man could be isolated from the Bill and maintain that he had no knowledge of what was going on. [Interruption.] I do not


know why Members opposite, none of whom ever seek to take part in the Debate but sit here by way of amusement because they can think of nothing else to do, are so concerned that we should proceed over-hastily in this matter. We are very anxious to establish that not only the Corporation but a director, or some other person engaged in the Corporation, should be considered innocent until proved guilty. The Solicitor-General comes along and says it is quite easy to ascertain that a publicly-owned company under this Bill is engaged in some action that is contrary to the statute, and that that can be proved. But when we get as far as the office of the company, it is then impossible to go any further. The directors, officials and managers are very difficult to locate; they are slippery and out of the picture, and no fault can be pinned on them.
If the evidence is so slender that to establish a case the whole cherished principle has to be reversed so that these people have to prove their innocence, then it must be very slender evidence indeed. Looking at the thing metaphorically, there is no case for the Director of Public Prosecutions to take action against the Corporation, if it has committed an offence, and then to instruct his men, when they get as far as the office of the Corporation, to hold their hands because it is impossible to go any further and bring the directors into court. Having established that the Corporation have committed some wrongful act, then we should proceed against the Corporation and all those connected with it. I do not like the explanation the Solicitor-General has given, and I am sure we shall be perfectly right in voting in favour of this Amendment.

8.15 p.m.

Mr. Frank Byers: The Solicitor-General seemed to say that although the normal principle in this country was to assume a man innocent until proved guilty, in this case he felt we should reverse the procedure. To what extent are the Government prepared to abide by the Charter of Human Rights? In December the Government signed that Charter, and one of the principles in it was that a man should be presumed innocent until proved guilty. Presumably the Government were serious in their

intentions when signing that Charter, and legislation thereafter, no matter what had happened up to that time, should be in accordance with the principles of that Charter. The Solicitor-General presumably knows that this is one of the principles in that Charter, and that it is going to have very important international results. To what extent are we, as the House of Commons, prepared in these circumstances to make an exception only four months after the signing of the Charter which embodies this principle?

Mr. Harrison: If I understood the Solicitor-General correctly, he tried to prove that collectively the Corporation had been proved guilty. [HON. MEMBERS: "Presumed guilty."] Substantially proved guilty.

The Solicitor-General: The corporation has to be proved guilty in the first place.

Mr. Harrison: Having proved that the corporation are guilty collectively, I think my right hon. and learned Friend wants to allocate the blame for any misdemeanour, which is the whole point of this Clause. In those circumstances, I cannot understand the argument of Members opposite.

Colonel Crosthwaite-Eyre: Having heard the Solicitor-General answering Debates on this question many times, I thought that his new excuse for promulgating this kind of Clause was quite the weakest I have heard. He now says it may well be that the Corporation will commit some offence under this Bill, and, therefore, once we have established the offence, we are going to presume that the directors are guilty. That is a remarkable denial of justice. Whatever may be the responsibility of the directors, the only people who will benefit from any offence are the Corporation. Why make the directors guilty? An hon. Member opposite says, "They should be"—

Mr. W. R. Williams: No, I said "Who should be?"

Colonel Crosthwaite-Eyre: The Solicitor-General is merely erecting a figure of straw to shoot at. Let us assume that a corporation wishes to evade the requirements of this Bill. What will it do?


It will appoint nominee directors who are men of straw, who will not be able to pay any fine when called upon to do so by the Government. The Clause as drafted does nothing to defend the rights and privileges which the Government wish to assume; it is merely a piece of class hatred.

The Solicitor-General: indicated dissent.

Colonel Crosthwaite-Eyre: What are directors? They are merely people who represent a company or corporation after having been elected to manage the affairs of that company or corporation. They may make a right or wrong decision, but the last thing that those who have elected those directors want is to see them singled out in order to bear the penalties of their decision. The Solicitor-General knows that in the last few weeks the Minister of Fuel and Power has had to admit that the development of the electricity industry has been held up for 18 months because a Clause similar to this was put into the Electricity Act. It put upon directors of electricity industries exactly the same penalties as are imposed here. All that happened was that every director said, "I shall do nothing." I know there is an escape Clause, whereby one can write to the Minister and get his permission to carry on, but what has happened in the case of the Electricity Act will happen to good directors coming under this Bill. Development will be stopped and national recovery will be handicapped. Those people whom the Solicitor-General is trying to catch under this Clause will outwit him every time.
The only thing the Government are doing is to introduce, once again, a piece of class prejudice towards private enterprise. What they may expect to receive if somebody cheats is nothing. Instead of trying to stand by a flowery Clause like this it would be far better for the Government to say that directors are responsible people, who will not cheat. If there is a company which does cheat, then it is the company which does that and not the directors. All that the Clause does is to seek cheap applause from the Government back benches.

Mr. Turner-Samuels: Is it clear that the hon. and gallant Member for New Forest and Christchurch (Colonel Crosthwaite-Eyre) anticipates that directors and executive personnel who will

be involved in this matter will be guilty. To demonstrate his weak case the hon. and gallant Member talked a lot of nonsense about class hatred. What this has to do with class hatred I do not know.

Mr. Stokes: It is only Tories who talk about it.

Mr. Turner-Samuels: This is the position which is bound to arise under this legislation: if there is a body corporate which, inevitably, must act by some executive hand, and that body has done something in contravention of the Clause, the Government cannot go for the body corporate. They have to go for a person, and that person can only be a director or one of the executives mentioned in the Clause. It is said that according to the principles of our law a person is presumed to be innocent until he is found to be guilty. That, of course, is a sacrosanct principle which nobody would seek to weaken, but where is it weakened by the provisions of this Clause? This is not a case of a person committing an offence; it is a case of a body corporate committing an offence by giving false information. Who must be made responsible?
Supposing we did what this fatuous Amendment seeks to do—make the prosecution prove that the director or executive person has been guilty. How on earth is the prosecution going to do that? The company has committed something which is fraudulent and false, and the director and the executive are responsible for the conduct of this company's business. If the director has deliberately or by negligence, allowed this to take place, he is responsible, and if he is not he should tell the court why. Any other method would be absolutely impracticable. Therefore there is no question of the subject's liberty at all. The amount of lip-service to that doctrine that comes from the other side of the House has no relation to reality at all, because if it had we should not hear of it.

8.30 p.m.

Mr. Ellis Smith: Now hon. Members opposite are getting their answer—[Interruption]—

Mr. Byers: Mr. Byers rose—

Mr. Turner-Samuels: I have not the time to give way—

Mr. Stokes: Give the Liberal Party a chance.

Mr. Turner-Samuels: I must say that the noble Lord the Member for East Dorset had such a strong case that he really did not know what matter he was talking about—

Viscount Hinchingbrooke: May I point out that the hon. and learned Member for Gloucester (Mr. Turner-Samuels) has directed his criticism exactly half way between the hon. Member for North Dorset (Mr. Byers) and myself. I being the Member for South Dorset.

Mr. Turner-Samuels: It shows how hollow was the whole case of the noble Lord who got up to talk about something when he was not quite sure what was the case to which he was addressing himself. I do not blame him for the misadventure of not knowing the case he had to put, but to stand up and pretend to argue in favour of it was to my mind absolutely insincere. The matter falls within a very small compass. The point is—is it conceded that information should be given? That is the first point. The second point is—if it is to be given, is true information to be given?

Mr. Ellis Smith: That applies particularly to lawyers.

Mr. Turner-Samuels: If false information is given, who on earth is to be responsible? It cannot physically be the body corporate itself. It might properly be a director or some executive officer, and that person is saved if he can prove, when charged, that he is absolutely innocent and not responsible for the act.

Mr. H. Strauss: When a point of law is becoming comparatively clear in this House it is often covered with the utmost confusion by the intervention of the hon. and learned Member for Gloucester (Mr. Turner-Samuels). I have a serious point which I wish to put to the right hon. and learned Solicitor-General. I apologise because I was not in the House at the beginning of this discussion and I missed some of the speech of the right hon. and learned Gentleman. The general effect of his speech, I think—I do not think I am misrepresenting him and he will correct me if I am wrong—is that he said that there is ample precedent—and it is indeed a necessary practice—when an offence is brought home to a limited

liability company for transferring the onus of proof as regards the liability of directors and officers of that company. That is to say, when it is once established that a company has committed an offence, certain officers of the company shall be presumed to share a criminal liability until they establish their innocence. I agree with him in the proposition that there are many precedents for that.
What I find very difficult to do is to construe the two particular Clauses here together, Clause 53 and Clause 54. Clause 53 defines the offence, a necessary element in which is the knowledge of the falsity of the statement in a material particular. It states:
If any person in…making any claim or giving any notice…makes any statement which he knows to be false.…
In the case of a limited liability company for "he" we have to imagine a company throughout. There has to be that guilty knowledge in the company. I am now considering the offence under Clause 53. But how on earth is that proved in every case before there is a liability on the director under Clause 54?
Under Clause 54 the presumption can apply where there is no such guilty knowledge. It is really extremely difficult to construe the two Clauses together. That is the reason for the question I put at the end of the speech of the right hon. and learned Gentleman. If the Clause creating the offence is something that has a perfectly easy test—say, supplying milk which has been diluted—and a limited liability company has done that, it is quite possible to say that, that offence having clearly been brought home to the limited liability company, the directors may have to clear themselves. But the offence set out in Clause 53 is not an offence of that kind at all. It is an offence which itself has an element of guilty knowledge in it. In those circumstances I believe that the right hon. and learned Gentleman, with the numerous precedents which he has found, did not completely cover the present case. I think that he will also find that the words suggested in this Amendment will generally be satisfactory to him.
It was curious that when the hon. and learned Member for Gloucester was speaking, he described what he thought was satisfactory and mentioned almost precisely the words of the Amendment. I hope that the right hon. and learned


Gentleman will reconsider this Clause. There is another Amendment to the Clause to be considered later, but I hope that he will particularly consider whether his main decision upon the Clause we are now considering is really correct. In my submission it is not, because there is no satisfaction of the prior condition of proving an offence by the limited liability company itself.

Mr. Gallacher: As a layman, I am astounded at the lack of knowledge which the legal men in this House show about the laws of this country. That remark applies to the Front Bench as well. The legal men when they are in court are always on the wrong side. They are at the dispensing end, and not at the receiving end, so that they do not have the same opportunity of knowing how the law operates. I wish to ask hon. Members opposite if it is not the case that the law has operated in the manner set out in this Clause, time and again, without the slightest protest of any kind from any of them.
I was the chairman of a committee which owned a paper, "The Worker," up in Glasgow. The editor of the paper published an article which I had never seen. The editor was arrested, and I was arrested and I got 12 months, as art and part, utterly regardless of whether I was innocent or guilty so far as knowledge of the article was concerned. [Interruption.] Do not hon. Members know anything about "art and part"? [HON. MEMBERS: "No."] Well, I served 12 months. Hon. and right hon. Members on the other side should try to understand and appreciate the attitude of hon. Members on this side towards this point. We have always had inscribed on our banners "Rent is Robbery, Profit is Plunder." So far as directors of companies are concerned, in our opinion already they are guilty. It is only a matter of finding a suitable pretext, and in they go. Once we get them in, they will have very great difficulty in getting out.

Mr. Lyttelton: When all the directors of companies are put inside, one thing will be clear, and that is that the hon. Member for West Fife (Mr. Gallacher) will be almost alone on those benches. I look around and I see, except on the Front Bench—[Interruption.] Well, they

may go inside as well as the hon. Member himself. Except for Members on the Front Bench, who are excluded from holding offices of profit under the Crown, almost everybody on that side is a director of some company or other, and the hon. Gentleman will be very lonesome.
I should like to make two short points. The Solicitor-General, in opposing the Amendment, said it was a highly controversial matter. I submit that, where a matter is highly controversial and the pros and cons are keenly disputed, it always ought to be decided by the people having to be proved guilty by the prosecution rather than they themselves having to prove their innocence. If we say that the matter is highly controversial, we are condemning these people before it is proved. Secondly, there are some extremely naïve ideas put forward by some hon. and learned Gentlemen who from time to time are briefed by these companies. We are led to believe that companies do things which nobody else can ascertain, and even the Solicitor-General has said that where companies do things we cannot attach any blame to any individual. Has he not heard that corn-panics keep minutes which are open to inspection?

Mr. Turner-Samuels: Does the right hon. Gentleman suggest that a person is going to put down in the minutes the fact that he has given false information?

Mr. Lyttelton: No. If it is not in the minutes, it is very unlikely that the director gave the information. It may have been the accountant or somebody else. In any case, it is not at all difficult for him to prove, because there must be a document and some officials with knowledge of it. The hon. and learned Gentleman talks about limited companies as if they were a sort of razor gang on Brighton racecourse. [Interruption.] That is not how the hon. and learned Gentleman describes them. Of course, he did not say that. I am saying that the hon. and learned Gentleman treated limited companies as if they were razor gangs on Brighton racecourse and it was extremely difficult to say who slashed whom. Limited companies are not like that. Where the actions of a company are concerned, the directors have to be aware of them, and really this is one of the most curious legal arguments which


I have heard in the last four years—and that is saying something. But when the Solicitor-General says that it is highly controversial whether a person should be presumed to be innocent before he is proved to be guilty, then I think the argument ought to come down on the side

of the individual, and we shall certainly divide the House on this Amendment.

Question put, "That the words proposed to be left out to the word 'and,' in line 6, stand part of the Bill."

The House divided: Ayes, 300; Noes, 135.

Division No. 124.]
AYES
[8.46 p.m.


Adams, Richard (Balham)
Edwards, Rt. Hon. Sir C. (Bedwellty)
Kinley, J.


Albu, A. H.
Edwards, John (Blackburn)
Kirby, B. V.


Allen, A. C (Bosworth)
Edwards, Rt. Hon. N. (Caerphilly)
Kirkwood, Rt. Hon. D


Alpass, J. H.
Edwards, W. J. (Whitechapel)
Lang, G.


Anderson, A. (Motherwell)
Evans, Albert (Islington, W.)
Lavers, S.


Anderson, F. (Whitehaven)
Evans, E. (Lowestoft)
Lee, Miss J. (Cannock)


Attewell, H. C.
Evans, John (Ogmore)
Leonard, W.


Austin, H. Lewis
Evans, S. N. (Wednesbury)
Leslie, J. R.


Awbery, S. S
Ewart, R.
Levy, B. W.


Ayles, W. H.
Fairhurst, F.
Lewis, A. W. J. (Upton)


Ayrton Gould, Mrs. B
Farthing, W. J.
Lewis, J. (Bolton)


Bacon, Miss A.
Field, Capt. W. J.
Lewis, T. (Southampton)


Balfour, A.
Fletcher, E. G. M. (Islington, E.)
Lipton, Lt.-Col. M.


Barnes, Rt. Hon. A J
Follick, M.
Logan, D. G.


Barstow, P. G.
Foot, M. M.
Lyne, A. W


Barton, C.
Forman, J. C.
McAdam, W.


Battley, J. R.
Fraser, T. (Hamilton)
McAllister, G.


Bechervaise, A. E
Freeman, John (Watford)
McGhee, H. G


Benson, G.
Gaitskell, Rt Hon. H T N
McGovern, J.


Beswick, F.
Gallacher, W.
Mack, J. D.


Bing, G. H. C
Ganley, Mrs. C S
McKay, J. (Wallsend)


Binns, J.
Gibbins, J
Mackay, R. W. G. (Hull, N.W.)


Blackburn, A. R
Gibson, C. W.
McKinlay, A. S.


Blenkinsop, A
Gilzean, A.
McLeavy, F.


Boardman, H.
Glanville, J. E. (Consett)
MacPherson, Malcolm (Stirling)


Bottomley, A. G.
Gooch, E. G.
Macpherson, T. (Romford)


Bowden, Fig. Offr. H. W.
Goodrich, H. E.
Mainwaring, W. H.


Braddock, Mrs. E. M. (L'pl. Exch'ge)
Greenwood, A. W J. (Heywood)
Mallalieu, E. L. (Brigg)


Braddock, T. (Mitcham)
Grenfell, D. R
Mallalieu, J. P. W. (Huddersfield)


Bramall., E. A.
Grey, C. F.
Mann, Mrs. J.


Brook, D. (Halifax)
Grierson, E.
Manning, C. (Camberwell, N.)


Brooks, T. J. (Rothwell)
Griffiths, D. (Rother Valley)
Manning, Mrs. L. (Epping)


Broughton, Dr. A. D. D.
Guest, Dr. L. Haden
Mathers, Rt. Hon. George


Brown, George (Belper)
Gunter, R J.
Mayhew, C. P.


Brown, T. J (Ince)
Guy, W. H
Medland, H. M.


Bruce, Maj. D. W. T.
Hale, Leslie
Mellish., R. J.


Burke, W. A.
Hall, Rt. Hon. Glenvil
Middleson, Mrs. L


Callaghan, James
Hamilton, Lieut.-Col. R.
Mikardo, Ian


Carmichael, James
Hannan, W. (Maryhill)
Millington, Wing-Comdr. E. R


Castle, Mrs. B. A
Hardman, D. R.
Mitchison, G. R.


Chetwynd, G. R.
Hardy, E. A.
Moody, A. S.


Cluse, W. S
Harrison, J.
Morgan, Dr. H. B.


Cobb, F. A.
Hastings, Dr. Somerville
Morris, P. (Swansea, W.)


Cocks, F. S.
Haworth, J
Morrison, Rt. Hn. H. (Lewisham, E.)


Collick, P
Henderson, Rt. Hon. A. (Kingswinford)
Mort, D. L.


Collindridge, F
Henderson, Joseph (Ardwick)
Moyle, A.


Collins, V. J.
Hicks, G.
Murray, J. D.


Colman, Miss G. M
Holman, P.
Naylor, T. E.


Comyns, Dr. L.
Holmes, H. E. (Hemsworth)
Neal, H. (Claycross)


Corbet, Mrs. F. K. (Camb'well, N.W.)
Horabin, T L
Nichol, Mrs. M. E. (Bradford, N.)


Corlett, Dr. J.
Hoy, J.
Nicholls, H. R. (Stratford)


Cove, W. G.
Hubbard, T.
Noel-Baker, Capt. F E. (Brentford)


Crawley, A.
Hudson, J. H. (Ealing, W)
Oldfield, W. H.


Crossman, R. H. S
Hughes, Emrys (S. Ayr)
Oliver, G. H


Cullen, Mrs.
Hughes, H. D. (W'lverh'pton [...]W.)
Orbach, M.


Daggar, G.
Hynd, H. (Hackney, C.)
Paget, R. T.


Dalton, Rt. Hon. H.
Irvine, A. J. (Liverpool)
Paling, Rt. Hon. Wilfred (Wentworth)


Davies, Edward (Burslem)
Isaacs, Rt. Hon, G. A.
Paling, Will T. (Dewsbury)


Davies, Harold (Leek)
Janner, B.
Palmer, A. M. F.


Davies, Haydn (St. Pancras, S.W.)
Jay, D. P. T.
Pargiter, G. A.


Davies, R. J. (Westhoughton)
Jeger, Dr. S. W. (St. Pancras, S.E.)
Parker, J.


Davies, S. O. (Merthyr)
Jenkins, R. H.
Parkin, B. T.


Deer, G.
John, W.
Paton, Mrs. F. (Rushcliffe)


de Freitas, Geoffrey
Johnston, Douglas
Paton, J. (Norwich)


Diamond, J.
Jones, D. T. (Hartlepool)
Pearson, A.


Dobbie, W.
Jones, Elwyn (Plaistow)
Perrins, W.


Donovan, T.
Jones, Jack (Bolton)
Popplewell E.


Driberg, T. E. N.
Jones, P. Asterley (Hitchin)
Porter, E. (Warrington)


Dugdale, J. (W. Bromwich)
Kenyon, C.
Porter, G. (Leeds)


Ede, Rt. Hon. J. C.
Kinghorn, Sqn.-Ldr E.
Price, M. Philips




Proctor, W. T.
Smith, C. (Colchester)
Wallace, H. W. (Walthamstow, E.)


Pryde, D. J.
Smith, Ellis (Stoke)
Warbey, W. N.


Pursey, Comdr. H
Smith, H. N. (Nottingham, S.)
Watkins, T. E.


Randall, H. E.
Smith, S. H. (Hull, S. W.)
Webb, M. (Bradford, C)


Ranger, J.
Solley, L. J.
Weitzman, D.


Rankin, J.
Sorensen, R. W
Wells, P. L. (Faversham)


Rees-Williams, D. R
Soskice, Rt. Hon Sir Frans
Wells, W. T. (Walsall)


Reeves, J.
Sparks, J. A
West, D. G.


Reid, T. (Swindon)
Steele, T.
Wheatley, Rt. Hn. J. T. (Edinb'gh. E.)


Rhodes, H.
Stokes, R. R.
White, H. (Derbyshire, N.E.)


Ridealgh, Mrs. M.
Strachey, Rt. Hon. J.
Whiteley, Rt. Hon W


Roberts, Goronwy (Caernarvonshire)
Strauss, Rt. Hon G R (Lambeth)
Wigg, George


Robertson, J. J. (Berwick)
Stross, Dr. B
Wilkes, L.


Robinson, K. (St. Pancras)
Swingler, S.
Wilkins, W A


Rogers, G. H. R.
Sylvester, G. O
Willey, O. G. (Cleveland)


Ross, William (Kilmarnock)
Symonds, A. L.
Williams, D. J. (Neath)


Royle, C.
Taylor, H. B. (Mansfield)
Williams, J. L. (Kelvingrove)


Sargood, R.
Taylor, R. J. (Morpeth)
Williams, Ronald (Wigan)


Scollan, T.
Taylor, Dr. S. (Barnet)
Williams, Rt. Hon. T. (Don Valley)


Scott-Elliot, W.
Thomas, D. E. (Aberdare)
Williams, W. R. (Heston)


Segal, Dr. S.
Thomas, George (Cardiff)
Willis, E.


Shackleton, E. A. A
Thomas, I. O. (Wrekin)
Wise, Major F. J.


Sharp, Granville
Thomas, John R. (Dover)
Woodburn, Rt. Hon. A


Shawcross, C. N. (Widnes)
Thurtle, Ernest
Wyatt, W.


Shurmer, P.
Timmons, J.
Yates, V. F


Silkin, Rt. Hon. L
Turner-Samuels, M
Young, Sir R. (Newton)


Silverman, J. (Erdington)
Ungoed-Thomas, L.
Younger, Hon. Kenneth


Silverman, S. S. (Nelson)
Usborne, Henry
Zilliacus, K


Simmons, C. J.
Vernon, Maj. W F



Skeffington, A. M.
Viant, S. P.
TELLERS FOR THE AYES:


Skeffington-Lodge, T. C
Walker, G. H
Mr. Snow and Mr. George Wallace.




NOES


Amory, D. Heathcoat
Headlam, Lieut.-Col. Rt. Hon. Sir C
Peake, Rt. Hon. O.


Astor, Hon. M.
Henderson, John (Cathcart)
Peto, Brig. C. H. M


Baldwin., A. E
Hinchingbrooke, Viscount
Pickthorn, K.


Barlow, Sir J.
Hogg, Hon. Q.
Ponsonby, Col. C. E


Beamish, Maj. T. V. H
Hulbert, Wing-Cdr. N. J
Price-While, Lt.-Col. D


Bennett, Sir P.
Hurd, A.
Prior-Palmer, Brig. O.


Birch, Nigel
Hutchison, Lt.-Cm. Clark (E'b'rgh W.)
Raikes, H. V.


Boothby, R.
Hutchison, Col. J. R. (Glasgow, C.)
Ramsay, Maj. S.


Bossom, A. C.
Jeffreys, General Sir G.
Rayner, Brig. R.


Bower, N.
Kingsmill, Lt.-Col. W. H
Renton, D.


Boyd-Carpenter, J. A.
Lambert, Hon. G.
Roberts, Emrys (Merioneth)


Braithwaite, Lt.-Comdr. J. G.
Lancaster, Col. C. G
Roberts, H. (Handsworth)


Bromley-Davenport, Lt.-Col. W
Langford-Holt, J.
Robinson, Roland (Blackpool, S.)


Buchan-Hepburn, P. G. T.
Legge-Bourke, Maj. E. A. H.
Ropner, Col. L.


Butcher, H. W.
Lennox-Boyd, A. T.
Scott Lord W.


Byers, Frank
Lindsay, M. (Solihull)
Shepherd, S. (Newark)


Challen, C.
Linstead, H. N.
Smiles, Lt.-Col. Sir W.


Clarke, Col. R. S.
Lloyd, Selwyn (Wirral)
Smith, E. P. (Ashford)


Clifton-Brown, Lt.-Col. G
Lucas, Major Sir J.
Snadden, W. M.


Conant, Maj. R. J. E.
Lucas-Tooth, S. H.
Spearman, A. C. M.


Corbett, Lieut.-Col. U. (Ludlow)
Lyttelton, Rt. Hon. O.
Stoddart-Scott, Col. M.


Crosthwaite-Eyre, Col. O. E.
MacAndrew, Col. Sir C.
Strauss, Henry (English Universities)


Cuthbert, W. N.
McCallum, Maj. D.
Studholme, H. G.


Darling, Sir W. Y.
McCorquodale, Rt. Hon. M. S
Sutcliffe, H


Davidson, Viscountess
McFarlane, C. S.
Taylor, C. S. (Eastbourne)


Digby, Simon Wingfield
Macpherson, N. (Dumfries)
Taylor, Vice-Adm. E. A. (P'dd't'n, S.)


Dodds-Parlor, A. D.
Maitland, Comdr. J. W.
Thomas, Ivor (Keighley)


Drayson, G. B
Manningham-Buller, R. E
Thorneycroft, G. E. P. (Monmouth)


Drewe, C.
Marlowe, A. A. H.
Thornton-Kemsley, C. N.


Dugdale, Maj. Sir T. (Richmond)
Marsden, Capt. A.
Thorp, Brigadier R A. F


Eccles, D. M.
Marshall, D. (Bodmin)
Touche, G. C.


Fletcher, W. (Bury)
Marshall, S. H. (Sutton)
Vane, W. M. F.


Fox, Sir G.
Maude, J. C.
Wadsworth, G.


Fraser, H. C. P. (Stone)
Mellor, Sir J.
Walker-Smith, D.


Fraser, Sir I. (Lonsdale)
Moore, Lt.-Col. Sir T.
Ward, Hon. G. R


Galbraith, Cmdr, T. D. (Pollok)
Morris, Napkin (Carmarthen)
Webbe, Sir H. (Abbey)


Galbraith, T. G. D. (Hillhead)
Morrison, Maj. J. G. (Salisbury)
Wheatley, Colonel M. J. (Dorset, E.)


Gates, Maj. E. E.
Morrison, Rt. Hn. W. S (Cirencester)
While, Sir D. (Fareham)


George, Maj. Rt. Hn. G. Lloyd (P'ke)
Mott-Radclyffe, C. E
White, J. B. (Canterbury)


George, Lady M. Lloyd (Anglesey)
Mullan, Lt. C. H.
Willoughby de Eresby, Lord


Glyn, Sir R.
Neven-Spence, Sir B.
Winterton, Rt. Hon. Earl


Gomme-Duncan, Col. A
Nicholson, G.
York, C.


Granville, E. (Eye)
Noble, Comdr. A. H. P.
Young, Sir A. S. L. (Partick)


Grimston R. V.
Odey, G. W.



Hare, Hon. J. H. (Woodbridge)
O'Neill, Rt. Hon Sir H
TELLERS FOR THE NOES:


Harvey, Air-Comdre. A. V.
Orr-Ewing, I. L.
Commander Agnew and




Brigadier Mackeson.

Mr. Lyttelton: I beg to move, in page 54, line 6, to leave out "and," and to insert "or."
We have traversed a lot of the ground of this Amendment on the previous one, and if the Government will accept this Amendment they will do something to mitigate the effects of the Clause. If the word "and" is changed to the word "or" the person required to prove his innocence would have only to prove one of two alternatives, that the offence was committed without his consent or connivance, or that he had exercised diligence to prevent it. I do not want to go all over these arguments again, and I hope the Government will give us this little bit of cold comfort to make up for their uncompromising attitude over guilt and innocence in the previous Amendment.

The Solicitor-General: I deployed the arguments against this Amendment when I was answering the previous one. I can, I think, go over them very shortly indeed. If the defence were made alternative, it would be the easiest thing in the world for a director always to escape responsibility by resorting to the simple expedient of staying away at the crucial time. He could then perfectly well say that he had established one of the alternative defences, namely, that he had not consented to or connived at the commission of the offence. Were we to accept the Amendment we should then completely nullify the effect of the Clause, and there would be no point in having it at all if it were one so easy of evasion. For those reasons I hope the House will agree that this Amendment ought to be rejected.

Colonel Crosthwaite-Eyre: May I ask the right hon. and learned Gentleman if he will look at line 6? He will see the words
without his consent or connivance and that he exercised all such diligence.…
We seek to alter the word "and" to the word "or." How would the case arise of which the right hon. and learned Gentleman spoke, of the director's always being away at the crucial time? He would not necessarily have to be present in any case. It does not seem to me that the right hon. and learned Gentleman's supposition bears investigation.

The Solicitor-General: If the man is out of the way he would neither have consented nor connived.

Colonel Crosthwaite-Eyre: How? How would he not? He has to prove he is out of the way.

Amendment negatived.

Clause 58.—(INTERPRETATION.)

Mr. G. R. Strauss: I beg to move, in page 55, line 25, at the end, to insert:
consumer, in relation to any products, means a person who uses the products for manufacturing purposes or is engaged in the merchanting of those products.
This is consequential really on the new Clause 6, which deals with the Consumers' Council. It widens the definition of the word "consumer" to include dealer, and thereby we meet the representations made to us by a number of consumers' interests.

Mr. Lyttelton: We are much obliged to the right hon. Gentleman.

Amendment agreed to.

Mr. Strauss: I beg to move, in page 56, line 29, at the end, to insert:
manufacturing purposes, includes the carrying-out of building operations and works of construction or civil engineering and the treatment of products by any process.
This is in amplification of the new Clause 3, and is necessary because of the reference to "manufacturing purposes" in Clause 3 and in the new definition of "consumer." It makes clear that it covers a person who does not process a product in the normal manufacturing sense.

Amendment agreed to.

9.0 p.m.

Further Amendments made: In page 56, line 40, after "of," to insert: "a managing director or of."

In page 57, line 33, leave out from "any," to "means," in line 35, and insert "activities."

In page 58, line 4, after "or," insert "of."—[Mr. G. R. Strauss.]

New Schedule.—(MATTERS TO BE EX- PRESSLY STATED IN AUDITORS' REPORT.)

1. Whether they have obtained all the information and explanations which to the best of their knowledge and belief were necessary for the purposes of their audit.

2. Whether, in their opinion, proper books of account have been kept by the Corporation, so far as appears from their examination of those books, and proper returns adequate for


the purposes of their audit have been received in respect of books of account not examined by them.

3. Whether the statement of the accounts of the Corporation prepared under Part IV of this Act is in agreement with the said books of account and returns, and whether, in their opinion and to the best of their information and according to the explanations given them, the said statement gives a true and fair view of the state of the Corporation's affairs as at the end of their financial year, and of the profit or loss for their financial year.

4. Whether, in their opinion, the consolidated statement of accounts prepared by the Corporation under Part IV of this Act gives a true and fair view of the state of affairs and profit or loss of the Corporation and the publicly-owned companies dealt with thereby.

Brought up, and read the first time.

Mr. G. R. Strauss: I beg to move, "That the Schedule be read a Second time."
The Schedule is consequential upon the Amendment to Clause 38, page 42, line 3. It arises from certain discussions which we had in Standing Committee, and it sets out certain matters which must appear in the auditors' report. As the Corporation does not strictly come under the Companies Act, the matters which the auditors must report do not automatically follow the Companies Act. We were anxious, nevertheless, that their report should contain the various matters which the auditors have to report under the Companies Act and, therefore, we put in this Schedule.

Schedule read a Second time and added to the Bill.

Second Schedule.—(IRON AND STEEL ACTIVITIES.)

Mr. Manningham-Buller: I beg to move, in page 61, line 39, to leave out "20,000," and to insert "50,000."
I think it would be convenient if we considered this Amendment and the Amendments in page 61, lines 41 and 44. at the same time.

Mr. Deputy-Speaker (Mr. Bowles): If hon. Members would like to divide on each of these Amendments, Mr. Speaker has indicated his assent.

Mr. Manningham-Buller: We will reserve consideration of that problem until we have heard the reply of the Government. Even at this late hour, we are not without hope that the Govern-

ment may take a more reasonable attitude to some of our Amendments.
The effect of the Amendment is, of course, to limit the operation of the Bill. We think that the Bill is an extremely bad one and will do a great deal of harm. The effect of increasing the amount from 20,000 tons to 50,000 tons will mean that the scope and degree of harm which the Bill will do will be limited, and for that reason alone this Amendment is a good one. I ask the right hon. Gentleman to tell us on what principle he has acted in determining that the figure should be 20,000. I hope that it is not the case that he has arbitrarily selected that figure. There must have been some ground for selecting it rather than 50,000. If it is purely an arbitrary selection, I suggest that the figure of 50,000 is a much better figure for this purpose.

Lieut.-Commander Braithwaite: I beg to second the Amendment.

Mr. G. R. Strauss: I do not think the Opposition will be surprised if I oppose this Amendment. Of course, the figure of 20,000 is an arbitrary figure, as would be the figure of 50,000 which the Opposition seek to insert in its place. We naturally considered this matter at great length, and very carefully. We were anxious to bring into the new iron and steel organisation those major companies in the industry which really form the core of the industry, together with that section on the fringe of the industry, doing ancillary and subsidiary work, which really make up the iron and steel industry of this country, as it is generally known.
These companies could be made into an organisable and integratable whole—I apologise for the expression—which could be effectively run by the Iron and Steel Corporation without great difficulty, but which would nevertheless be large enough to allow measures for efficiency, economy, and reorganisation to be introduced in the industry. To insert the figure of 50,000 in the place of 20,000 would leave out a very large number of companies which we think ought to be included. We think that 20,000 is the right figure. I therefore ask the House to reject this Amendment, which would materially alter the structure and size of the organisation under the Corporation.

Viscount Hinchingbrooke: I hope that my hon. Friends will press this Amendment to a Division. We had a useful and


quite exciting discussion on this in Committee, when my hon. and right hon. Friends pressed the point of view that the only future for the British iron and steel industry lay in the fact of firms whose productivity was of the order of 20,000 to 50,000 tons being outside the Government sepulchre. I hope that my hon. Friend the Member for Keighley (Mr. Ivor Thomas), whose speech in Committee I have just been re-reading, will also contribute to this Debate even at this late hour.
It ought not to pass from the public consciousness altogether that, by reason of the arbitrary figure selected by the Minister, firm after firm, with famous names going right back into history, which have been brought to a high state of development by honest and courageous businessmen and their forefathers before them, are now seized by the Government, tightly embraced, made to conform to the wishes of the Government of the day, and not allowed to develop as they want towards one activity or another. They are cabined, cribbed and confined, and we foresee in this tight organisation a very serious danger for the future of our country. We do not think that from now on, technological development in industry will go forward at anything like the same rate, simply because there are—

Mr. Deputy-Speaker: The noble Lord must confine himself to the number of tons produced per year. He must not develop his present argument at too great length.

Viscount Hinchingbrooke: I was about to say that, simply because there are set out in this Schedule, under the limitation of tonnage imposed by the Minister, so many companies which from now on will not be in an independent position to compete effectively against each other, we shall see, because of that lack of competition, less and less progress, and less and less technological development in industry. We therefore hope that the Government will accept our Amendment.

Mr. Ivor Thomas: The Minister has suggested that any figure that might be placed in the Schedule would be an arbitrary figure. That is the not the case. There is a figure at which the smelting of iron ore in the blast furnace becomes worth while and a figure at which the

production of ingots becomes worth while. I do not profess to know what that figure may be, but there must be such a figure, and the consequence of the figure of 20,000 tons inserted by the Minister is that the sector of this great industry which is left in private hands will not be able to compete as efficiently as would otherwise be the case with the publicly-owned sector, for it will not have a production sufficiently large to make it worth while. I do not know what the real figures should be, but I know that 20,000 is not large enough.

Mr. Renton: This Bill has a potential merit which all its predecessors in nationalising industry have not had, and that is that by not nationalising all concerns, a degree of competition will be left. In order that the fullest possible advantage may be derived from that potential benefit, the degree of competition has to be real and substantial. If the Government make such a very low limit for compulsory acquisition, the number of firms left out and the size of them will not be sufficiently substantial to give the competition which will put the Corporation on its mettle and make it more efficient.
It is a great pity that the right hon. Gentleman did not give the House some indication of the difference between the number of firms which will be taken over under the Bill as it stands and the number which would be taken over if the Amendment were accepted. Nor did he give the total amount of output covered by that difference. We are therefore to a very great extent in the dark as to the precise substance of the difference between the two sides of the House. However, we are at any rate agreed that a degree of competition should remain. It seems to me that the object which both sides of the House apparently wish to be fulfilled will be much better fulfilled if the Amendment is accepted. I hope the Government will give this matter a second thought.

Mr. Harrison: I would remind the House that some of our most efficient smelting plants are plants which produce less than 20,000 tons—

Mr. Deputy-Speaker: The hon. Gentleman will be out of Order in pursuing that line. He has to argue whether 20,000 or 50,000 is the correct figure to be inserted in the Schedule.

Mr. Harrison: I accept your Ruling, Mr. Deputy-Speaker, but I thought I might mention the fact that companies producing less than 20,000 tons include some of our most efficient companies.

Mr. Renton: Would the hon. Gentleman agree that some companies producing less than 50,000 tons are among our most efficient?

Mr. Harrison: I admit that equally. My point was that the limit of 20,000 does not exclude efficiency in the smelting of iron and steel. Ancillary undertakings make that possible. I thought it as well to draw the attention of the House to that fact at this juncture.

Amendment negatived.

9.15 p.m.

Third Schedule.—(COMPANIES WHICH FULFIL CONDITION FOR VESTING OF THEIR SECURITIES.)

Mr. G. R. Strauss: I beg to move, in page 62, to leave out line 18.
This Amendment and the next three Amendments are consequential on the Government Amendments to Clause 11 which I moved previously.

Amendment agreed to.

Further Amendments made: In page 62, leave out lines 28, 29, 35 and 43.

In page 63, leave out line 41.—[Mr. G. R. Strauss.]

Mr. G. R. Strauss: I beg to move, in page 64, to leave out line 14.
This deals with a firm called William Jessop and Sons Ltd., who have their works at Brightside and are renowned for the high quality of their steel. We discovered only after the Bill was published—when the B.S.A. published their accounts—that the B.S.A. had purchased the assets of all their subsidiaries, including Jessops, so that Jessops itself remained only as an empty shell. It would have been quite possible under the Bill to bring in Jessops by including the B.S.A. Company, but we did not want to do that unless it was necessary, as there would have been many difficulties. We discussed the matter with the B.S.A. Company to see whether we could come to some reasonable settlement on the matter and we have agreed with them that they will give the Corporation an option to buy

all the steel-producing capacity they possess, which will include the actual Jessops works. Although, therefore, we are taking Jessops out of the Third Schedule, in fact the works can still come into the possession of the Corporation.

Amendment agreed to.

Fourth Schedule.—(ISSUE OF BRITISH IRON AND STEEL STOCK IN SATISFACTION OF COMPENSATION.)

Mr. Manningham-Buller: I beg to move, in page 65, line 42, to leave out from "shall," to "make." in line 43, and to insert
on the dates on which interest is payable on British Iron and Steel Stock.
I understand, Mr. Bowles, that the next Amendment on the Order Paper to line 43 goes with it, namely in line 43, leave out from "are," to "holders," in line 44, and insert "at the said dates." This is an Amendment to try to provide that the payment of interest on the securities to which Part II applies should run from the date of transfer and not from the date which will be selected by the right hon. Gentleman. I do not think it is necessary to make a long speech in support of these two Amendments. Obviously it is equitable that the holders of those securities should receive similar treatment to the holders of the other securities dealt with by the other part of the Schedule.

Mr. Glenvil Hall: As the hon. and learned Gentleman has indicated, I think we can dispose of these two Amendments without much trouble. It would be quite impossible, even if we accepted these Amendments, for the physical work to be done as suggested. There must be a balancing date, which, naturally, must be some days at least before the interest payment date, because the books have to be closed by the registrar and made up and the dividend warrants prepared for issue. I am not quite clear what the hon. and learned Gentleman and his hon. Friends have in mind. If they fear that there will be any undue delay, and that those entitled will not receive their modicum of interest, I can give him an assurance that that will not be so.
We have used these words in previous nationalisation Acts and, so far as I know, we have had no complaints whatever. The thing has worked smoothly.


Arrangements will be made with the Stock Exchange to see that the procedure, when it is put into operation, will be such as is suitable to them as well as to the stockholders and the companies concerned. I hope, therefore, that the hon. and learned Gentleman will be satisfied and will be willing to withdraw the Amendment.

Mr. Manningham-Buller: In view of what the Financial Secretary has said—and I am grateful to him for what he has said—I beg to ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Fifth Schedule.—(PROVISIONS AS TO OFFICE OF STOCKHOLDERS' REPRESEN- TATIVE, MEETINGS OF HOLDERS OF SECURITIES AND INCIDENTAL MATTERS.)

Mr. G. R. Strauss: I beg to move, in page 73, line 2, to leave out "1948," and to insert "1949."

This Amendment arises because of a printing error.

Amendment agreed to.

Sixth Schedule.—(ACQUISITION OF CERTAIN ASSETS.)

Mr. Deputy-Speaker: I think it would be for the convenience of the House for the next two Amendments, in page 75, lines 13 and 22, to be taken together.

Mr. Lyttelton: I beg to move, in page 75, line 13, to leave out paragraph 5.
The object of the Amendment is not a very wide one. Under the present drafting, compensation for assets recovered by a notice of acquisition under Clause 23 must be in stock. I think that this method will prove very cumbersome and unnecessary. I admit straight away it is quite understandable that the securities of companies which vest under the Bill should be compensated for in stock, but the kind of transfer which is anticipated under Clause 23 will take place very rarely and will be of a very minor character. I think that the person from whom such assets are to be acquired should at least be given the option to take

them in cash rather than in stock. I think the Minister will agree with this. Clause 23 (1, a, ii) covers, amongst other things, patent rights for which the consideration might be £500 or less. It will be inconvenient if that has to be settled in stock. In such cases it would be well for the owner to have the option to take cash.

Mr. Glenvil Hall: I understand that the Opposition desire that in cases of this kind, instead of stock being issued for compensation or in settlement, cash should be given. I am advised that these assets would normally not have been disposed of and therefore they would form part of the undertakings owned by the companies whose shareholders are to be compensated for the vesting of their securities by the issue of Iron and Steel Corporation stock. I am advised that it is right that the recovery of assets under Clause 23 should be similarly compensated, particularly as the purchase and disposal of the assets must have been made at the time when the provisions of Clause 23 and the Sixth Schedule had been made public.
We are very anxious, where possible, to meet the Opposition on small points—[Interruption]—on points other than those of principle. I am sure the noble Lord the Member for South Dorset (Viscount Hinchingbrooke) would not desire us to go against our own principles, any more than we would expect him to do so. Where it is not a matter of principle, we are willing to meet the Opposition on drafting points. Here I am told the point is one of some substance and we are unable to accept the Amendment.

Amendment negatived.

Eighth Schedule.—(MODIFICATIONS AS TO CONSTITUTION AND PROCEEDINGS OF PUBLICLY-OWNED COMPANIES.)

Amendment made: In page 92, line 21, at beginning, insert:
6. A publicly-owned company shall not, without the consent in writing of the Minister, so alter the provisions of its memorandum of association or, as the case may be, charter of incorporation or other charter as to increase the activities which it is authorised to carry on."—[Mr. G. R. Strauss.]

Bill as amended, recommited to a Committee of the whole House in respect of the Amendments to Clause 15, page 15, line 36, line 37, line 43, and line 47; page 16, line 9, line 12, and line 26; standing on the Notice Paper in the name of Mr. Lyttelton.—[Mr. Lyttelton.]

Bill immediately considered in Committee.

[Mr. BOWLES in the Chair]

Clause 15.—(COMPENSATION TO HOLDERS OF SECURITIES.)

Mr. Peake: I beg to move, in page 15, line 36, at the end, to insert:
(8) (a) If it is proved by the stockholders' representative or by the Minister that the values of a company's securities as agreed or determined under the provisions of subsections (2) to (7) inclusive and (9) of this section (in this section referred to as "the Stock Exchange values") in the aggregate fall short of or exceed the value of the company's undertakings and assets on the first day of October nineteen hundred and forty-eight the amount of such short fall shall be added to the Stock Exchange values or the amount of such excess shall be deducted therefrom as hereinafter provided and the Stock Exchange values as adjusted by such additions or deductions shall become the values of those securities for the purposes of this section.
(b) For the purposes of this section the value of a company's undertaking and assets on the first day of October, nineteen hundred and forty-eight, shall be such amount as they might have been expected to realise if—

(i) they had been sold on the said date in the open market by a willing seller to a willing buyer;
(ii) in so far as they comprised a business capable of being sold as a going concern they had been so sold; and
(iii) this Act had not been in contemplation.
(c) If with respect to any company the stockholders' representative or the Minister desires to prove any matter which may be proved by him under this subsection, he shall so inform the Minister or the stockholders' representative (as the case may be) by notice in writing given within three months after the date of transfer.
Owing to the exigencies of the timetable, we are left with approximately half an hour to discuss the all-important question of compensation which is raised in Clause 15. In Committee we discussed a number of Amendments dealing with this matter, but none was in the form of the Amendment now before the Committee. The basis of compensation adopted by the Bill is the Stock Exchange quota-

tions for stocks and shares upon four selected days in October, 1948, with an alternative of a date in 1945. We say that this method of expropriating the stockholders on the basis of the very small number of stocks and shares which changed hands on a particular day or days is grossly unjust. As a result, debenture holders will lose approximately 20 per cent. of their income, holders of preference shares will lose approximately 25 per cent. of their income, and holders of ordinary shares will lose nearly half of their incomes. We think it will be exceedingly difficult for Government supporters to justify to the hundreds of thousands of stock and shareholders in these concerns why it is that they should lose such a large proportion of their income.
9.30 p.m.
The method adopted is highly convenient. It enables the Government to acquire valuable assets on the cheap. Wherever an arbitration has been permitted in all the many nationalisation Measures which the Government have introduced, invariably the arbitration has resulted in something substantially in excess of the value placed upon the shares as a result of Stock Exchange quotations. I would instance the case of the arbitration during the war when the Government thought it necessary to expropriate a firm of aircraft manufacturers known as Short Bros. The Treasury offered the Stock Exchange quotation of the day, but when the matter went to arbitration, and the concern was valued as a going concern, a very much higher figure was arrived at. I would instance also the case of Cable and Wireless, where the late Lord Uthwatt was appointed arbitrator to settle the value of the assets to be transferred. As a result of Lord Uthwatt's valuation, a very much higher figure has been given than that which would have resulted from a Stock Exchange quotation.
The method of expropriation in this way is swift and convenient. Those are, I think, its only merits. It is highly unjust. It completely fulfils what I am told is the schoolmasters' motto, "Swift Injustice"; but it is not for that reason to be commended for the expropriation of the savings of law-abiding citizens. The fact is that Stock Exchange prices on a particular day represent only a very few dealings. Indeed, I suppose that in


these great iron and steel companies not more than 5 per cent. of the stocks and shares are transferred in the course of a year. On a particular day the proportion changing hands is, of course, an infinitesimal fraction of 1 per cent. The fact is that 99 per cent. or more of the stock and shareholders are determined and anxious to continue to hold their shares, and the prices resulting from these few transactions are no guide whatsoever to the value of the undertaking as a whole. More particularly are they not a true guide in a year when there is in progress a once-for-all capital levy, which compels stock' and shareholders to realise part of their capital in order to pay the charge placed upon them.
The Chancellor of the Exchequer said that the Stock Exchange quotations were transactions between willing buyers and willing sellers. He said that the seller wanted the money and the buyer wanted the shares, and therefore it must be a transaction between willing buyers and willing sellers. I would remind the Committee that Dick Turpin, the highwayman, wanted the money and the traveller wanted his life. That was the alternative with which he was presented. It is, therefore, absurd to say that all these transactions are upon the basis of a willing buyer and a willing seller. Moreover, there is—and it is vitally important to consider this—the evil effect of taking this method of Stock Exchange prices upon the dividend policy of all the concerns which are still in the queue for nationalisation. Cement, insurance and other industries are in the queue. They are expected to observe a dividend limitation, but it is very difficult for the directors, if they have any sense at all of their duty towards their shareholders, not to increase their dividends in order to increase the quotations of their stocks and shares upon the Stock Exchange.
I will explain the effect of our Amendment. It states:
If it is proved by the stockholders' representative…
he is to be appointed under the Bill—
…or by the Minister that the values of a company's securities as agreed or determined under the provisions of subsections (2) to (7) inclusive and (9) of this section…
that is in accordance with the Stock Exchange quotations—

in the aggregate fall short of or exceed the the value of the company's undertakings and assets on the first day of October nineteen hundred and forty-eight the amount of such short fall shall be added to the Stock Exchange values or the amount of such excess shall be deducted therefrom as hereinafter provided and the Stock Exchange values as adjusted by such additions or deductions shall become the values of those securities for the purposes of this section.
Then it goes on to set out the value of a company's undertaking and assets. It states that they shall be:
…such amount as they might have been expected to realise if—

(i) they had been sold on the said date in the open market by a willing seller to a willing buyer 
(ii) in so far as they comprised a business capable of being sold as a going concern they had been so sold;"
Those conditions for the valuation of the undertaking are taken directly from the Sixth Schedule to the Bill. They are the conditions prescribed by the Minister himself where he wishes to claw back into the Iron and Steel Corporation assets which have been transferred to outside bodies. It will be observed that our Amendment is a two-way Amendment. If upon the valuation of the undertaking it should fall short of the aggregate of the Stock Exchange values, then the smaller figure is taken. If, on the other hand, the value of the undertaking exceeds the Stock Exchange values, then the higher figure is taken. That provision is made in order to meet the criticism made in Standing Committee that our proposal that there should be a valuation of assets was a one-way Amendment by which the stockholder invariably stood to gain. Under our Amendment there can be arbitration upon the value of the concern at the request of either party. It seems to us to be an eminently fair arrangement between the Government on the one hand and the stockholders on the other.
In the Committee, we had some discussions upon whether or not these iron and steel companies had increased their dividends since the end of the war. Broadly speaking, our case was that, in order to finance the great development plan for the industry, which was estimated to cost some £300 million, these companies have conserved their resources, ploughed back their profits and kept their dividends down. The Financial Secre-


tary to the Treasury will recall that there was a great deal of controversy on this point between him and myself. Since then, I have got out some more comprehensive figures than were available to us during the Committee stage, and the fact is that between 1945 and 1948 the additional distributions by way of dividends from the companies now in the Third Schedule to the Bill amounted to the comparatively small sum net of £575,000, and that is compared, of course, with a capital valuation figure of something like £300 million for compensation provided by the Bill.

Mr. Chetwynd: On that point, would the right hon. Gentleman correct the statement which he made to the Committee that only three corn-panics had increased their dividends?

Mr. Peake: Most certainly. We had a great deal of discussion about this, and I am now going to give the results furnished in a Written Answer by the Minister of Supply in which he set out all of the names of the companies which had increased their dividends between 1945 and 1948.
I am now telling the Committee that the net result of all this was that £575,000 more was distributed in 1948 than in 1945, due to increases of the dividend rate, but that comparatively small figure has to be compared with two other figures of great interest to the Committee—one the increased wage bill of these companies, which had increased in 1948 as compared with 1945 by no less than £10 million, and, secondly, that during these four years these companies had ploughed back into their businesses, by additions to reserves or increases of amounts carried forward, no less than £15 million. That £15 million, representing the amount ploughed back out of profits during those four years, exceeded the total amount distributed by way of dividends on ordinary shares during those four years. That shows quite clearly that, throughout this period, these companies were in fact conserving their resources and pursuing a very careful and conservative dividend policy with a view to finding the money necessary for the great development plan.
That leads me to the remarkable pledge given in the House by the pre-

decessor of the right hon. Gentleman the Minister of Supply on 27th May, 1946. There was a two days' Debate on the nationalisation of iron and steel, in the course of which the Minister of Supply of that day stated categorically that this question of capital development—he was talking of the development plan which was calculated at that time to cost £168 million, which figure, of course, is very much larger now than it was then—was the most important aspect of the whole matter. He said:
I would like to give the industry an assurance about the future…pending the putting into effect of the Government's proposals. We are most anxious that the industry shall proceed energetically, and I feel sure that they will, with those urgent measures which are so necessary for the country's recovery.
He went on to say:
The Chancellor of the Exchequer, who, as I have said, will be speaking tomorrow, has authorised me to assure the industry that whatever the final method and basis adopted, proper allowance will be made in assessing compensation for the results of any expenditure incurred from now onwards on approved schemes of development or rehabilitation."—[OFFICIAL REPORT, 27th May, 1946; Vol. 423, c. 853–4.]
9.45 p.m.
That pledge was obviously intended to mean something at the time it was given it was meant to be an assurance to the industry that if they ploughed back their profits and kept down their dividends, they would receive due reward for their abstinence when the time came for nationalisation. I want the Committee to note that two very clear conditions were laid down in this pledge, a pledge which was endorsed on the following day by the Chancellor of the Exchequer. The first was that they should receive compensation for the results of expenditure "incurred from now onwards"; that was to say that, from 27th May, 1946, some special allowance was intended which would not apply to capital expenditure undertaken before that date. The second condition was that there should be Ministerial approval for the developments upon which capital expenditure was taking place.
Both those conditions have been fulfilled. It has been with Ministerial approval, with priority given by the Government, and with licences specially granted that these companies have been enabled to spend and plough back vast


sums into capital development during the last three years. Of course, the results of that expenditure cannot yet be seen. Capital expenditure of this character is not immediately remunerative, but at the same time there is no doubt that these vast sums have been so spent, and that in the upshot, by taking Stock Exchange values as the basis of nationalisation, no proper allowance of any sort is being given to the companies in fulfilment of this unqualified pledge given both by the Minister of Supply and the Chancellor of the Exchequer in May, 1946. In fact, the only defence to the charge, not only that Stock Exchange values are themselves intrinsically unfair, but that, in this particular case, the Government have fallen down upon a pledge deliberately given,—or, rather, the only defence put forward to the second charge that a pledge has been deliberately broken—is that the pledge was worthless at the time it was made. I say without hesitation that this pledge should never have been given, but, that having been given, it should have been strictly fulfilled both in the spirit and in the letter.

Mr. Glenvil Hall: The right hon. Member for North Leeds (Mr. Peake) has made some very serious charges and, unfortunately, he has not left me very much time in which to refute them. [HON. MEMBERS: "Whose fault is that?"] I will, however, do my best in the time at my disposal. [HON. MEMBERS: "Ask the Lord President for more time?"] This is a very long and reasoned Amendment.

Mr. Dodds-Parker: Why not give some time to argue it?

Mr. Glenvil Hall: It can be paraphrased quite shortly. What we propose by way of compensation to holders of the securities in the Third Schedule companies is that they should be paid compensation stock which is guaranteed by the Government both as to principal and interest. We intend to assess the value of the stock to be issued by a certain formula which is laid down and the normal value will be based on Stock Exchange prices, according to whether they were on the average better before the General Election or just before the Bill was introduced.
What the Amendment proposes is that we should not take the Stock Exchange price at all as our basis, but that we should value the assets of the companies concerned and if they are greater than the Stock Exchange price an addition should be made to that price if they are less, the Minister of Supply would benefit by a reduction of the Stock Exchange price. I hope I am not doing the right hon. Gentleman an injustice, but I think that, briefly, is the suggestion. It is quite obvious that the right hon. Gentleman thought that would place the Government in a dilemma because, according to the speeches of hon. and right hon. Members opposite, we have always asserted, so they say, that by taking the Stock Exchange price we get the value of the sum total of the securities in any concern. Let me say at once that that never has been our contention.

Mr. Godfrey Nicholson: What about the pledge?

Mr. Glenvil Hall: What we have said is that the individual investor should receive proper compensation for his investment, and we have looked at him and at no one else. Under the terms proposed, it is quite obvious that the individual investor will get gilt-edged stock, carrying a rate of interest which is reasonable and which will continue year after year, if he goes on holding that stock, whereas at the present time, although in some cases he may be receiving a greater return than he will receive in future, that return is not as certain as that from a Government issue.
In 1929, 48 per cent. of the iron and steel shares which are now being taken over and to which, as I have indicated, this guaranteed rate of interest is to be given, paid no dividend whatever. That was looked upon in the palmy days of Tory rule as rather a good thing. In 1934, when Toryism had once again got into its stride, 84 per cent. of those securities paid no dividend. Therefore, it is quite obvious that by taking the Stock Exchange price the shareholders of the new stock, as and when it is issued, will be getting a good bargain. The proof of that is that if hon. Members will only go to "The Times" today, and will look down the list of Stock Exchange quotations, they will find that the Electricity Stock and the Transport Stock are both at a fairly considerable premium,


and today the Gas Stock, which has just been recently issued, has also gone to a premium.

Mr. Drayson: What about "Daltons"?

Mr. Glenvil Hall: In the few minutes I have left, let me deal with the very serious charge made by the right hon. Gentleman against my right hon. and learned Friend the Chancellor of the Exchequer and my right hon. Friend the then Minister of Supply.

Mr. H. Strauss: The previous Chancellor.

Mr. Glenvil Hall: In 1946, it is true, my right hon. Friend said—

Colonel Gomme-Duncan: Which one?

Mr. Glenvil Hall: Both of them. They said that as and when the iron and steel industry was nationalised those concerns which ploughed back, which developed and rehabilitated their equipment, would find that, when nationalisation of the industry took place, that would be taken into account. The charge is that that promise has not been implemented. [HON. MEMBERS: "Hear, hear."] I am here to say that it has been implemented up to the hilt. [HON. MEMBERS: "How?"] The right hon. Gentleman gave us figures to show that many of these concerns had accepted the suggestion of my right hon. and learned Friend, and had ploughed back into the industry much of the profits they had made, to the tune of £15 million, in fact. Let me put it to hon. Gentlemen opposite that what has happened has been this, that where a particular concern has thus put its reserves to a good use, and has installed new equipment, that is now obviously reflected in the Stock Exchange price. [HON. MEMBERS: "Oh."] I hope hon Gentlemen opposite will allow me to finish the argument

Mr. J. Langford-Holt: Does the right hon. Gentleman call that honouring a pledge?

Hon. Members: Resign.

Mr. Glenvil Hall: Where one of the companies listed in the Third Schedule has gone in for rehabilitation, the money for such rehabilitation must have come from one of two sources, either from reserves or from borrowing. If it has been

borrowed—[Interruption.] Do not hon. Gentlemen want to hear the argument? It will now be taken over as a liability by the Corporation—

It being Ten o'Clock, the DEPUTY-CHAIRMAN OF WAYS AND MEANS proceeded, pursuant to Order, to put forthwith the Question on the Amendment already proposed from the Chair.

The Deputy-Chairman (Mr. Bowles): The Question is—

Hon. Members: Gag! Resign! [Interruption.]

The Deputy-Chairman: Hon Members must try to behave themselves. I very much deprecate that this—

Colonel Dower: Sit down.

The Deputy-Chairman: I order the hon. and gallant Gentleman to withdraw that remark or to leave the Chamber at once.

Colonel Dower: I thought that I saw an hon. Member standing up—[Interruption.]

The Deputy-Chairman: Did the hon. Gentleman withdraw that remark?

Colonel Dower: No, Mr. Bowles, I was about to say—

The Deputy-Chairman: Then the hon. and gallant Gentleman withdraws from the Chamber.

Colonel Dower: I was referring to an hon. Member—

The Deputy-Chairman: Order. I am on my feet.

Colonel Dower: There was an hon. Member—

The Deputy-Chairman: The hon. Gentleman should withdraw from the Chamber at once.

Colonel Dower: I will, but there was an hon. Member—

The Deputy-Chairman: Without another word. The hon. Gentleman will now withdraw from the Chamber, otherwise I shall report the matter to the House.

Colonel Dower: On a point of Order—

The Deputy-Chairman: There is no point of Order at all.

Colonel Dower: I want to ask—

The Deputy-Chairman: I shall now—

Colonel Dower: Very well, I shall leave the Chamber, and I am very pleased to do so.

The hon. and gallant Member thereupon withdrew.

Mr. Gallacher: On a point of Order—

The Deputy-Chairman: There can be no point of Order. I shall now put the Question.

Question put, "That the proposed words be there inserted."

The Committee divided: Ayes, 158; Noes, 325.

Division No. 125.]
AYES
[10.0 p.m.


Agnew, Cmdr. P. G.
Harvey, Air-Comdre, A. V.
Neven-Spence, Sir B.


Amory, D. Heathcoat
Head, Brig. A. H.
Nicholson, G.


Astor, Hon. M.
Headlam, Lieut.-Col. Rt. Hon. Sir C.
Noble, Comdr. A. H P


Baldwin, A. E.
Henderson, John (Cathcart)
Nutting, Anthony


Barlow, Sir J.
Hinchingbrooke, Viscount
Odey, G. W.


Beamish, Maj. T. V. H
Hogg, Hon. Q.
O'Neill, Rt. Hon Sir H


Bennett, Sir P
Holmes, Sir J. Stanley (Harwich)
Orr-Ewing, I. L.


Birch, Nigel
Hope, Lord J.
Peake, Rt. Hon. O.


Boothby, R.
Howard, Hon. A
Peto, Brig. C. H. M


Bossom, A. C.
Hudson, Rt. Hon. R S. (Southport)
Pickthorn, K.


Bowen, R.
Hulbert, Wing-Cdr. N. J.
Ponsonby, Col. C. E


Bower, N.
Hurd, A.
Price-White, Lt.-Col. D


Boyd-Carpenter, J. A.
Hutchison, Lt.-Cm. Clark (E'b'rgh W.)
Prior-Palmer, Brig. O


Braithwaite, Lt.-Comdr. J. G
Hutchison, Col. J. R. (Glasgow, C.)
Raikes, H. V.


Bromley-Davenport, Lt.-Col. W
Jeffreys, General Sir G.
Ramsay, Maj. S.


Buchan-Hepburn, P. G. T.
Keeling, E. H.
Rayner, Brig. R.


Butcher, H. W.
Kingsmill, Lt.-Col. W. H
Renton, D.


Butler, Rt Hn. R. A. (S'ffr'n W'ld'n)
Lambert, Hon. G.
Roberts, Emrys (Merioneth)


Byers, Frank
Lancaster, Col. C. G
Robinson, Roland (Blackpool, S.)


Carson, E
Langford-Holt, J.
Ropner, Col. L.


Challen, C.
Legge-Bourke, Maj. E. A. H
Ross, Sir R. D. (Londonderry)


Clarke, Col. R. S.
Lennox-Boyd, A. T.
Scott Lord W.


Clifton-Brown., Lt.-Col. G.
Lindsay, M. (Solihull)
Shephard, S (Newark)


Corbett, Lieut.-Col. U. (Ludlow)
Linstead, H. N.
Smiles, Lt.-Col. Sir W.


Crookshank, Capt. Rt Hon H. F. C.
Lloyd, Selwyn (Wirral)
Smith, E. P. (Ashford)


Crosthwaite-Eyre, Col. O E.
Low, A. R. W.
Snadden, W. M.


Crowder, Capt. John E
Lucas, Major Sir J.
Spearman, A. C. M


Cuthbert, W. N
Lucas-Tooth, S. H.
Stoddart-Scott, Col. M.


Davidson, Viscountess
Lyttelton, Rt. Hon. O.
Strauss, Henry (English Universities)


De la Bere, R.
MacAndrew, Col. Sir C.
Sutcliffe, H.


Digby, Simon Wingfield
McCallum, Maj. D.
Taylor, C. S. (Eastbourne)


Dodds-Parker, A. D.
McCorquodale, Rt. Hon M. S.
Taylor, Vice-Adm. E. A. (P'dd't'n, S.)


Drayson, G. B
McFarlane, C. S
Thomas, Ivor (Keighley)


Drewe, C.
Mackeson, Brig. H. R.
Thorneycroft, G. E. P. (Monmouth)


Dugdale, Maj. Sir T. (Richmond)
McKie, J. H. (Galloway)
Thornton-Kemsley, C. N


Eccles, D. M.
MacLeod, J.
Thorp, Brigadier R. A. F.


Elliot, Lieut.-Col. Rt. Hon Walter
Macmillan, Rt. Hon. Harold (Bromley)
Touche, G. C.


Fletcher, W. (Bury)
Macpherson, N. (Dumfries)
Tweedsmuir, Lady


Foster, J. G. (Northwich)
Maitland, Comdr. J. W.
Vane, W. M. F


Fox, Sir G
Manningham-Buller, R. E
Walker-Smith, D.


Fraser, H. C. P. (Stone)
Marlowe, A A. H.
Ward, Hon G. R.


Fraser, Sir I. (Londale)
Marsden, Capt. A.
Webbe, Sir H. (Abbey)


Galbraith, Cmdr. T. D. (Pollok)
Marshall, D. (Bodmin)
Wheatley, Colonel M. J. (Dorset, E.)


Galbraith, T. G. D. (Hillhead)
Marshall, S. H. (Sutton)
White, Sir D. (Fareham)


Gates, Maj. E. E.
Maude, J. C.
While, J. B. (Canterbury)


George, Maj. RI. Hn. G. Lloyd (P'ke)
Medlicott, Brigadier F.
Williams, Gerald (Tonbridge)


George, Lady M. Lloyd (Anglesey)
Mellor, Sir J.
Willoughby de Eresby, Lord


Glyn, Sir R.
Molson, A. H. E.
Winterton, Rt. Hon. Earl


Gomme-Duncan, Col. A
Moore, Lt.-Col. Sir T.
York, C.


Granville, E. (Eye)
Morris, Hopkin (Carmarthen)
Young, Sir A. S. L. (Partick)


Gridley, Sir A.
Morrison, Maj. J. G. (Salisbury)



Grimston. R. V.
Morrison, Rt. Hn. W. S. (Cirencester)
TELLERS FOR THE AYES:


Hannon, Sir P. (Moseley)
Mott-Radclyffe, C. E.
Mr. Studholme and


Hare, Hon. J. H. (Woodbridge)
Mullan, Lt. C. H.
Major Conant.




NOES


Acland, Sir Richard
Attewell, H. C.
Barnes, Rt. Hon. A. J.


Adams, Richard (Balham)
Attlee, Rt. Hon. C. R.
Barstow, P. G.


Albu, A. H.
Austin, H. Lewis
Barton, C.


Alexander, Rt. Hon. A. V
Awbery, S. S
Battley, J. R.


Allen, A. C. (Bosworth)
Ayles, W. H.
Bechervaise, A. E


Alpass, J. H.
Ayrton Gould, Mrs B
Benson, G.


Anderson, A. (Motherwell)
Bacon, Miss A.
Beswick, F.


Anderson, F. (Whitehaven)
Balfour, A.
Bing, G. H. C




Binns, J.
Gunter, R. J
Morris, Lt.-Col. H. (Sheffield, C.)


Blackburn, A. R
Guy, W. H.
Morris, P. (Swansea, W.)


Blenkinsop, A.
Hale, Leslie
Morrison, Rt. Hn. H. (Lewiham, E.)


Blyton, W. R.
Hall, Rt. Hon. Glenvil
Mort, D. L.


Boardman, H.
Hamilton, Lieut.-Col. R.
Moyle, A.


Bottomley, A. G.
Hannan, W. (Maryhill)
Murray, J. D.


Bowden, Flg. Offr. H. W.
Hardman, D. R.
Naylor, T E.


Braddock, Mrs. E. M. (L'pl. Exch'ge)
Hardy, E. A.
Neal, H. (Claycross)


Braddock, T. (Mitcham)
Harrison, J.
Nichol, Mrs. M. E. (Bradford, N.)


Bramall, E. A.
Hastings, Dr. Somerville
Nicholls, H. R. (Stratford)


Brook, D. (Halifax)
Haworth, J.
Noel-Baker, Capt. F. E. (Brentford)


Brooks, T. J. (Rothwell)
Henderson, Rt. Hon. A. (Kingswinford)
Noel-Baker, Rt Hon. P. J. (Derby)


Broughton, Dr. A. D. D.
Henderson, Joseph (Ardwick)
O'Brien, T.


Brown, George (Belper)
Holman, P.
Oldfield, W. H


Brown, T. J. (Ince)
Holmes, H. E. (Hemsworth)
Oliver, G. H


Bruce, Maj. D. W. T.
Horabin, T. L.
Orbach, M.


Burke, W. A.
Houghton, A. L. N. D
Paget, R. T.


Callaghan, James
Hoy, J.
Paling, Rt. Hon. Wilfred (Wentworth)


Carmichael, James
Hubbard, T.
Paling, Will T. (Dewsbury)


Castle, Mrs. B. A.
Hudson, J. H. (Eating, W.)
Palmer, A. M. F.


Chamberlain, R. A
Hughes, Emrys (S. Ayr)
Pargiter, G. A.


Chetwynd, G. R.
Hughes, H. D. (W'lverh'pton, W.)
Parker, J.


Cobb, F A.
Hynd, H. (Hackney, C.)
Parkin, B. T.


Cocks, F. S.
Hynd, J. B. (Attercliffe)
Paton, Mrs. F. (Rushclifte)


Collick, P.
Irvine, A. J. (Liverpool)
Paton, J. (Norwich)


Collindridge, F
Irving, W. J. (Tottenham, N.)
Pearson, A.


Collins, V. J.
Isaacs., Rt. Hon. G. A.
Pearl, T. F.


Colman, Miss G. M
Janner, B.
Perrins, W


Comyns, Dr L.
Jay, D. P. T.
Popplewell, E.


Corbet, Mrs. F. K. (Camb'well, N. W.)
Jeger, Dr. S. W. (St. Pancras, S.E.)
Porter, E. (Warrington)


Corlett, Dr. J.
Jenkins, R. H
Porter, G. (Leeds)


Cove, W. G.
John, W.
Price, M. Philips


Crawley, A.
Johnston, Douglas
Pritt, D. N.


Crossman, R. H. S
Jones, D. T. (Hartlepool)
Proctor, W. T.


Cullen, Mrs.
Jones, Elwyn (Plaistow)
Pryde, D. J.


Daggar, G.
Jones, Jack (Bolton)
Pursey, Comdr. H


Dalton, Rt. Hon. H.
Jones, P. Asterley (Hitchin)
Randall, H. E


Davies, Edward (Burslem)
Kenyon, C.
Ranger, J


Davies, Harold (Leek)
Key, Rt. Hon. C. W.
Rankin, J.


Davies, Haydn (St. Pancras, S. W.)
Kinghorn, Sqn.-Ldr. E.
Rees-Williams, D. R.


Davies, R. J. (Westhoughton)
Kinley, J.
Reeves, J.


Davies, S. O. (Merthyr)
Kirby, B. V.
Reid, T. (Swindon)


Deer, G.
Kirkwood, Rt. Hon. D.
Rhodes, H.


de Freitas, Geoffrey
Lang, G.
Ridealgh, Mrs M.


Diamond, J.
Lavers, S.
Robens, A.


Dobbie, W.
Lee, Miss J. (Cannock)
Roberts, Goronwy (Caernarvonshire)


Dodds, N. N
Leonard, W
Robertson, J. J. (Berwick)


Donovan, T.
Leslie, J. R.
Robinson, K. (St. Pancras)


Driberg, T. E. N.
Lever, N. H.
Rogers, G. H. R.


Dugdale, J. (W. Bromwich)
Levy, B. W.
Ross, William (Kilmarnock)


Ede, Rt. Hon. J. C.
Lewis, A. W. J. (Upton)
Royle, C.


Edelman, M.
Lewis, J. (Bolton)
Sargood, R.


Edwards, Rt. Hon. Sir C. (Bedwellty)
Lewis, T (Southampton)
Scollan, T.


Edwards, John (Blackburn)
Lindgren, G. S.
Scott-Elliot, W.


Edwards, Rt. Hon. N. (Caerphilly)
Lipton, Lt.-Col. M
Segal, Dr. S.


Edwards, W. J. (Whitechapel)
Logan, D. G
Shackleton, E. A A


Evans, Albert (Islington, W.)
Lyne, A. W.
Sharp, Granville


Evans, E. (Lowestoft)
McAdam, W.
Shawcross, C. N. (Widnes)


Evans, John (Ogmere)
McAllister, G.
Shawcross, Rt. Hn. Sir H. (St. Helens)


Evans, S. N. (Wednesbury)
McGhee, H. G
Shurmer, P.


Ewart, R.
McGovern, J.
Silkin, Rt. Hon. L.


Fairhurst, F.
Mack, J. D.
Silverman, J. (Erdington)


Farthing, W. J.
McKay, J. (Wallsend)
Silverman, S. S. (Nelson)


Field, Capt. W. J
Mackay, R W. G. (Hull, N.W.)
Simmons, C J.


Fletcher, E. G. M (Islington, E.)
McKinlay, A. S.
Skeffington, A. M.


Follick, M.
McLeavy, F.
Skeffington-Lodge, T C.


Foot, M. M.
MacPherson, Malcolm (Stirling)
Skinnard, F. W.


Forman, J. C.
Macpherson, T. (Romford)
Smith, C. (Colchester)


Fraser, T. (Hamilton)
Mainwaring, W. H.
Smith, Ellis (Stoke)


Freeman, J. (Watford)
Mallalieu, E. L. (Brigg)
Smith, H. N. (Nottingham, S.)


Gaitskell, Rt. Hon. H. T. N.
Mallalieu, J. P. W. (Huddersfield)
Smith, S. H. (Hull, S.W.)


Gallacher, W.
Mann, Mrs. J.
Solley, L. J.


Ganley, Mrs. C S
Manning, C. (Camberwell, N.)
Sorensen, R. W


Gibbins, J.
Manning, Mrs. L. (Epping)
Soskice, Rt. Hon. Sir Frank


Gibson C. W
Mathers, Rt. Hon. George
Sparks, J. A


Gilzean, A.
Mayhew, C. P.
Steele, T.


Glanville, J. E. (Consett)
Medland, H. M.
Stewart, Michael (Fulham, E.)


Gooch, E. G.
Mellish, R. J
Strachey, Rt. Hon. J.


Goodrich, H. E.
Middleton, Mrs. L
Strauss, Rt. Hon. G. R. (Lambeth)


Greenwood, A. W. J. (Heywood)
Mikardo, Ian
Stross, Dr. B.


Grenfell, D. R
Millington, Wing-Comdr. E. R.
Stubbs, A. E.


Grey, C. F.
Mitchison, G. R.
Swingler, S.


Grierson, E.
Monslow, W.
Sylvester, G. O.


Griffiths, D. (Rother Valley)
Moody, A. S.
Symonds, A. L.


Guest, Dr. L. Haden
Morgan, Dr. H B
Taylor, H B (Mansfield)







Taylor, R. J. (Morpeth)
Watkins, T. E
Williams, Rt. Hon. T. (Don Valley)


Taylor, Dr. S. (Barnet)
Webb, M. (Bradford, C.)
Williams, W. T. (Hammersmith, S)


Thomas, D. E. (Aberdare)
Weitzman, D.
Williams, W. R. (Heston)


Thomas, George (Cardiff)
Wells, P. L. (Faversham)
Willis, E.


Thomas, I. O. (Wrekin)
Wells, W. T. (Walsall)
Wilson, Rt. Hon. J. H.


Thomas, John R. (Dover)
West, D. G.
Wise, Major F. J.


Thurtle, Ernest
Wheatley, Rt. Hn. J. T. (Edinb'gh, E.)
Woodburn, Rt. Hon. A


Timmons, J.
White, H. (Derbyshire, N. E.)
Wyatt, W.


Tomlinson, Rt. Hon. G
Whiteley, Rt. Hon. W.
Yates, V. F.


Turner-Samuels, M.
Wigg, George
Young, Sir R. (Newton)


Ungoed-Thomas, L.
Wilcock, Group-Capt. C. A. B
Younger, Hon. Kenneth


Usborne, Henry
Wilkes, L.
Zilliacus, K.


Vernon, Maj. W. F
Wilkins, W. A.



Viant, S. P.
Willey, O. G. (Cleveland)
TELLERS FOR THE NOES:


Walker, G. H.
Williams, D. J. (Neath)
Mr. Snow and


Wallace, H W. (Walthamstow, E.)
Williams, J. L. (Kelvingrove)
Mr. George Wallace.


Warbey, W. N.
Williams, Ronald (Wigan)



Motion made, and Question "That the Chairman do report the Bill, without Amendment, to the House" put, and agreed to.

Clause ordered to stand part of the Bill.

The DEPUTY-CHAIRMAN OF WAYS AND MEANS proceeded to put forthwith the Question necessary to dispose of the Business to be concluded at this day's sitting.

Bill reported without Amendment; to be read the Third time upon Thursday next and to be printed. [Bill No. 119.]

Later—

Earl Winterton: On a point of Order. I am given to understand that the name of an hon. and gallant Member who voted in the Division has not been included in the Division list because he had been ordered to leave the House. In Standing Order 21, which deals with the matter, there is no reference to any prohibition on voting.

Mr. Speaker: I should require to have notice of that question. I really cannot deal with it now.

Earl Winterton: May I give notice, then, that tomorrow I shall raise the matter of the admissibility of the vote?

GAS (CO-PARTNERSHIP) REGULATIONS

10.15 p.m.

Mr. Raikes: I beg to move,
That an humble Address he presented to His Majesty, praying that the Regulations, dated 18th March, 1949, entitled the Gas (Copartnership) Regulations, 1949 (S.I., 1949, No. 4751, a copy of which was laid before this House on 19th March, be annulled.
In moving the annulment of this order I am dealing with an extremely grave matter. We pass for the moment from

steel to gas, and the regulations which I move to annul deal with the extension of co-partnership schemes from 1949 to 1951. There are certain matters with regard to these which I hope in due course we shall have explained to us rather more clearly by the Minister.
My fear is that this extension of the gas co-partnership schemes from 1949 to 1951 is purely a bogus attempt on the part of His Majesty's Government to pretend that they are trying for a period to safeguard copartnership. I am sure that the Parliamentary Secretary will make a most courteous reply and I shall listen to him with the same deep attention with which I know he will listen to me. I want to ask the Parliamentary Secretary to explain why two years have been given as the period for extending these copartnership schemes. If the two years means that those brilliant arguments which my right hon. Friend and, indeed, my humble self put forward on the Committee stage have at last rung some sort of bell in the dim conscience of His Majesty's Government, it will be a belated sign of grace—but why two years?
Because this is an important order, I should like to call the attention of the House first to Regulation 2 (1), because that makes it quite plain why the existing co-partnership schemes can carry on until 31st March, 1951, but no new entrants will be permitted to come into the scheme. What does that mean? It means, in the first instance, that a distinction is drawn between the old entrants and the new entrants into co-partnership. [Laughter.] It may be that hon. Members opposite find something amusing in the withering away of the old co-partner-ship schemes and the profit-sharing schemes which have given advantage and hope and happiness to many people who entered into those first pioneer schemes


of profit-sharing and co-partnership in the gas industry.
I want to ask the Parliamentary Secretary, first and foremost, why new entrants to the gas industry are absolutely and deliberately debarred from coming in under the profit-sharing schemes. It might well be that if new entrants were permitted to come in a number of persons, realising the popularity—the popularity of the old copartnership schemes has been great—would be prepared to come in, even knowing that the schemes were to end in 1951, in the hope—the ever-growing hope—that between now and 1951 there would be a change of Government. [Interruption.] One never knows. Hon. Gentlemen opposite do not think so, I know; but that has nothing to do with this question.
People might be prepared to come in, with the ever-growing hope that with a change of Government the 1951 date might be extended. The fact that new entrants are refused admission, even it they are prepared to gamble on a change, seems a very obvious indication that the Government are afraid to allow what might be described as an "open shop" for new people to come into the copartnership schemes in the hope that, having come into them, they will continue beyond the date in 1951. That is the first point, and one which requires an answer.
The second point is, in a sense, of equal importance. It was made plain at an earlier stage when the Gas Bill was debated upstairs that no one's position would be worse after nationalisation than it was before. That was a Ministerial guarantee, and a proper guarantee to be given by the Government, but what will be the position now under this order? Old entrants can continue to draw their copartnership bonus until 1951, but new entrants who come into the gas industry between 1949 and 1951 will be unable under any conditions to draw the bonus. Take just one simple example. I shall not talk for long; this is not a matter on which we want a long Debate, but it is important because it deals with the rights not of rich directors or people of that type, but of men and women who have played a great part in the gas industry, many of them under very difficult conditions.
Under the scheme as it stands the old entrant will draw a salary of, say, £300 a year. He will also get his co-partner-ship bonus. If the bonus is five per cent, he will draw £315 in a year. On the other hand, the man who comes in after vesting day will get the same £300 a year but, even though he wants to join the copartnership scheme, he can draw no bonus. Therefore, we shall have two men side by side doing the same work, one drawing £315 a year but the other drawing only £300. Yet we are told that after nationalisation there will be no suffering and no disadvantage to any new entrant. This disadvantage appears to exist from the start, and it is a disadvantage which may well cause friction in the industry in the next few years.
I will not deal with the question of pension and bonus rights, but there is a further point. Persons who have been in the co-partnership schemes in the past have had the advantage of cheaper coal, cheaper gas and, in certain instances, cheaper insurance rates. I ask the Minister whether, under this order, those advantages are to continue in the next few years, or not.
Those seem to be three points of importance. Those of us who believe that co-partnership is something more than a mere phrase, and that it has caused a better spirit between employers and employed, whoever the employer may be, feel that even at this stage it is our duty to call attention to this order, to ask for an explanation and to reaffirm what we believe in our hearts—that the spirit of co-partnership is one of those many things which will tend to form the incentive that is required if we are to get the increased production which the whole nation needs.

10.26 p.m.

Mr. Boyd-Carpenter: I beg to second the Motion.
I do not think the Parliamentary Secretary will deny that in the gas industry not only has co-partnership endured for many years, but it has played a great part in the excellent industrial relations of which that industry is justly proud. For that reason, this order is of very great importance to thousands of people who have worked these co-partnership schemes smoothly and successfully for many years. It is of great importance to them and it is important because this


is the first occasion on which the Government have had to deal with large-scale co-partnership schemes in a nationalised industry. Therefore, their attitude, as expressed in this order, to co-partnership under nationalisation is not only immediately important to the thousands of men directly concerned, but equally indirectly important to other people in copartnership schemes in other industries, which from time to time may be menaced by nationalisation.
We are particularly anxious to extract from the Parliamentary Secretary this evening some explanation of the intention behind this order. It is a little difficult to understand why the Government has elected to continue co-partnership schemes for this period of slightly less than two years from vesting day, which was the first day of this month, until 31st March, 1951. Is this period fixed in order that the Government may work out some scheme for continuing copartnership in this industry indefinitely? If that is the intention, although the order may seem clumsily drafted, the intention is no doubt respectable. Or is it the case that the Government lack the courage to destroy the co-partnership schemes at the moment and prefer to allow them to starve to death?
The latter interpretation is somewhat reinforced by the prohibition on new entrants, to which my hon. Friend the Member for Wavertree (Mr. Raikes) referred. If it is to be a bridge during which a permanent scheme could be worked out, there would be no logical reason for prohibiting new entrants. If, on the other hand, the intention is that the schemes of co-partnership should be allowed gently to wither away, then it no doubt would be reasonable to prohibit new entrants. For that reason one is inclined to believe that the Government are pursuing an utterly disreputable course in this order. One knows perfectly well there is a strong movement in certain of the trades unions concerned against copartnership in any shape or form.
That view was bluntly expressed by a former Member of this House, the former hon. Member for Brigg, Mr. Williamson, who is now, I understand, secretary of one of the principal trades unions concerned. Mr. Williamson made it quite plain before he left this House that he

was opposed to co-partnership in any shape or form and that he believed it should be abolished. I do not share that view, but it is a frank and open one. The Government's attitude seems to be much less frank and open. It seems as if they have been affected by that attitude among certain of their supporters, but equally, they seem to realise that co-partnership commands great enthusiasm in the country outside. Therefore, they hesitate to make a frontal attack upon it.
I hope the Parliamentary Secretary will deal frankly and openly with the question: What is the purpose of this order? Is it to kill co-partnership or continue it? That is surely the test. If it is to continue, why, despite the manifest disadvantages, which I shall not recapitulate, as my hon. Friend referred to them very clearly, is there this ban on new entrants. I hope the Parliamentary Secretary will be frank, so that it will be possible for the House to decide whether the Government's attitude to the question of co-partnership is one which can command the support of the House. If he and the Government are preparing to attack and destroy co-partnership, that is a challenge which many of us will be very happy to accept.

10.33 p.m.

Colonel Clarke: I want to make it crystal clear why I am supporting the Prayer to annul this order, in case it should be thought that I was joining with those trades unions who want to take this opportunity of nationalisation to strangle a hated rival. I am supporting the Prayer because I believe this instrument is not capable of performing the duty that is imposed on it by Section 59 of the principal Act. I believe it is not doing justice to the promises that have been extended to that great body of copartners—some 54,000 of them spread over 58 different companies.
We cannot amend a statutory instrument. We can only accept or reject it. If the provisions of this instrument had been put in the Bill, as I believe they ought to have been, they could have been properly debated with the rest of the Bill: but for no apparent reason, except that procrastination which is so dear to Government departments, a year has elapsed before they have been put into statutory form and submitted to the House. Therefore, we have no choice but to accept the


statutory instrument as it stands or reject it. I think that, on form, it ought to be rejected. I would remind the Parliamentary Secretary that there is a statutory obligation on the Minister to provide some form of scheme in place of the old co-partnership scheme. Therefore, though we reject the proposed scheme, something else will have to be substituted.
I would make the following criticisms. First, the system whereby the three years before vesting date shall be averaged in computing the bonus payment is an unfair one. It is unfair particularly to those companies which, through no fault of their own—mainly through war bomb damage or the emigration of their consumers—have had a number of bad years. I believe that in the next two years, even under nationalisation, these companies may improve their results and co-partnership bonuses be paid. As it is, these co-partners are getting a purely illusory benefit. Double nothing is nothing, and they will get no bonus at all. The same thing applies to certain other companies which have been prevented from paying a bonus in the last three years because of the higher price of gas. That is the first reason.
The second reason has been referred to by the hon. Member for Wavertree (Mr. Raikes), and that is that new members will not be allowed to participate. I would remind the House that it is not only not being allowed to participate in the bonus payments which seems to me to be so unfair it is not being allowed to participate also in the many amenity schemes. In many cases, under these schemes the co-partners had cheaper gas, were allowed to have fittings installed at a lower charge or even installed free. They have convalescent centres and homes. Does this mean that young men coming into these schemes in the next two years will not be allowed to share these things? Does it mean that they will not be allowed to join in the joint workers' committees which are a feature of the schemes? If that is the case, I suggest that the bridge which the Minister says he is making between the old copartnership schemes and the new incentive schemes has a great many holes in it.
Thirdly, I think the provisions relating to welfare are going to be very difficult to carry out. These schemes and the feeling

of mutual ownership which has now gone by the board are much more important to the co-partners in many ways than actual cash payments. There are cases of companies which for a number of years have paid no cash bonus, yet the scheme is just as alive as ever because of the feeling engendered by the mutual working together. The statutory instrument says that these schemes remain in operation for two years. Is that possible, or are we going to have an amending Bill brought in, as in the case of the coal industry, saying that what was in the original orders cannot be carried out and has had to be scrapped?
I feel that to give the co-partners, or to give some of them—because the new entrants will not benefit—cheaper gas, cheaper installation of fittings, insurance, and a number of other benefits, is going to be difficult. I remember that on one occasion the Minister stated that if these perquisites, as he termed them, could not be given, they would be covered by the general definition of "emoluments." Are we to understand that, if they cannot be continued in kind, some cash payment is to be made instead?
For these reasons, I hold that this statutory instrument is inadequate. It gives the impression of a bridge, but that impression is purely illusory. In the words of the Minister, it was to be a bridge between the old schemes and the incentive arrangements of various kinds which may be designed to take their place. But I do not think it is a true bridge at all. It is much more like one of those planks the pirates used on their ships so that unwelcome persons or prisoners they wanted to get rid of could walk the plank and disappear from sight. That is what I think is happening by this instrument.

10.41 p.m.

Sir Patrick Hannon: I rise to put this question to the Parliamentary Secretary: is it the policy of His Majesty's Administration to destroy co-partnership in industry? I served for many years on the Co-operative Union at Manchester. I am certainly the only Tory Member of this House who was a member of the Co-operative Union, and I was a member at the same time of the great movement for industrial copartnership which was sponsored by Mr. Aneurin Williams who was an hon. Mem-


ber of this House. At that time in the Co-operative movement—

Mr. Speaker: We are not discussing the merits of co-partnership. We are discussing an order which has been made and which has been put before us, and we are governed by the Act. The merits of co-partnership are not under discussion now.

Sir P. Hannon: Then, Mr. Speaker, perhaps you will allow me to put this question. Is it the policy of the Government to destroy in the future any kind of co-partnership in industry with all the amenities it brings into industry? I put that question to the Parliamentary Secretary and hope he will answer it.

10.43 p.m.

The Parliamentary Secretary to the Ministry of Fuel and Power (Mr. Robens): If I might first reply to the hon. Member for Moseley (Sir P. Hannon), the answer is perfectly clear; the Government are not going to impose co-partnership schemes or take any action in connection with them, but are going to leave this matter to the workers in the industry through their organisations and to those who have been appointed to managements. I shall develop that in a moment or so.
I have said before in the House that there is nothing in any co-partnership scheme that I have seen, other than the distribution of profits, that cannot be obtained in the ordinary way through a trade union agreement. Clearly therefore the vesting date of the gas industry brings about a new arrangement. There can be no question of the disposal or allocation of profits to the workers in the industry, and all that this order does is to provide a period during which both sides of the industry, now that the area boards and the organisations to which the workers in the gas industry are attached, can get together and make new arrangements to take the place of the present co-partnership schemes which in fact do provide for a disposal of profits. There are a number of ways in which the schemes do this and I am sure the House does not want me to go into the details of all methods, but broadly speaking they do provide for the sharing of profits. That is impossible within the nationalised gas industry. The hon.

Member for Wavertree (Mr. Raikes) said, "Why two years?" Before these regulations were laid before this House we consulted the trade unions, the staff organisations, the Gas Engineers' National Guild, the Gas Co-partnership Nationalisation Committee, and the Gas Council, and there was general agreement that two years was a reasonable time in which both sides could get together and formulate new ideas.
The House will recollect that under Section 57 (a) of the Act, there is provision for the setting up of machinery to settle by negotiation terms and conditions of employment of persons employed by area boards. Nothing other than the disposal of profits is barred from this settlement. The hon. Gentleman seemed to think there was something peculiar about the two years. It is a question of there being a reasonable time in which the task can be accomplished. If the area boards and the organisations make their arrangements before the two years, their co-partnership schemes would not last two years and we should bring in the new regulations under the Act for winding up the schemes in a quite orderly way and carry on with the new arrangements which will be voluntarily arrived at between both sides.
I should make it clear, in reply to the question put by the hon. Member for Kingston-upon-Thames (Mr. Boyd-Carpenter), who asked if the Government wanted two years to work out new schemes, that the Government do not propose to work out any schemes at all. It is for the people in the industry to decide how they want their wages and conditions settled and they will do that without Government interference. I understand that there are a good many workers in the industry who do receive cheap gas, coke, and things of that description. During this period those concessions, if they are termed concessions, or privileges will be continued. It may well be that in the new arrangements the organisations representing the staff and the area boards might include them in their agreements. The miners have as part of their agreements concessionary coal. That is part of their wages and conditions structure, and I see no difficulty if that is desired on both sides in agreement being reached in the gas industry. It is not for the Government to interfere with these industries and I am satisfied


that the trade associations on the one hand and the area boards on the other are capable and competent enough to settle matters between them.
It has been said that we promised that nobody's conditions of employment should be worsened, and the hon. Member for Wavertree rather broadened that and suggested that nobody in the future should be disadvantaged. I think clearly the promise made was that conditions would not be worsened.

Mr. Raikes: After nationalisation.

Mr. Robens: After nationalisation. On that point he referred to the bar on new entrants. May I make this clear? There is no bar on new entrants to the scheme who are in the industry and have begun the qualifying period for entrants to the scheme. Let me put that another way: A man has to be employed in a company for three months or six months before he can enter. If he has started that, he can go into a scheme. We say that someone who is just entering the industry but who had not started the qualifying period prior to the vesting date should not go into the scheme. There is no reason why he should. We are going to finish these schemes as they are. We may carry some features into the new agreements but there is no point in bringing brand new entrants into a scheme which will be wound up within a comparatively short period.

Mr. Brendan Bracken: Why?

Mr. Robens: There is no sense in doing that. There is no point in putting a lot of people into co-partnership schemes which are going to be wound up. So far as the terms of wages and conditions are concerned I have no doubt that a man going into the industry after the vesting day will receive, apart from this bonus, wages and conditions which will be agreed between the unions and the area boards on that matter, and they will have to give consideration to what concessions other workers get in industry. After the two years, or even before, all the entrants into the industry after the vesting day—and those are the people we want to talk about—will come within the general body of the wages and conditions agreement. There is nothing sinister in this bar. It is merely a commonsense arrangement for doing the job. I think I have answered

all the points which have been made, very properly, and I hope that what I have said has satisfied hon. Members that all we are doing is carrying out the Act, being reasonable and not wanting to be ungenerous in any way to those people who have been in co-partnership schemes in the past.

10.51 p.m.

Mr. Frank Byers: I must say that I, for one, am not satisfied with the Parliamentary Secretary's answer. It seems to me that this order is merely designed to give a painless sort of death to the co-partnership schemes in the gas industry. I cannot understand why the Government should take this very poor view of co-partnership. It may be that they feel it has a bad reputation in the past, but I do not think that charge can be levelled against the gas industry.
In any case, the Government are now responsible for running the industry and, presumably, for the schemes which will be set up in it, whether they be co-partnership or the new schemes envisaged by the Minister. Therefore, there can be no attack upon co-partnership on the grounds of the responsibility of the employer. I cannot understand why the Minister, who envisages these new ideas. emoluments, bonus and incentive schemes, and so on, could not have done this through the framework of the present scheme, to be maintained and developed in the way that the Minister wishes. It is no use saying that the reason is because the nationalised gas industry will not make a profit. Already the Minister is envisaging various emoluments and bonus and incentive schemes—

Mr. Brendan Bracken: And already he is putting up the price of gas.

Mr. Byers: This is merely a question of accountancy. The money will be provided, the Minister says, not through a co-partnership scheme and a bonus at the end of the year, but through a different sort of bonus and incentive scheme and new emoluments. I have taken the trouble to talk to the workers in the gas industry about this and I find there is a burning resentment against this Government on the part of people who believe in nationalisation, and who welcome the nationalisation of the gas industry, because the Government are destroying


the co-partnership scheme within the industry.
I must say, quite frankly, that I suspect that the people who have been consulted over the principle of retaining or abandoning co-partnership are the trade union officials. I suggest that that is because they think that co-partnership is a scheme which is designed to bring the various elements within an industry together, thus making their own jobs insecure as far as bargaining and the organisation of the workers is concerned. I believe in a strong trade union movement. Hon. Members opposite cannot criticise the Liberal party on the ground of its record in this connection. Very great efforts were made by the Liberal Party in 1913, without which the trade union movement—

Mr. Speaker: Hon. Members cannot discuss the merits of co-partnership at this stage. Under the Act, regulations must be made.

Mr. Byers: I apologise, Mr. Speaker, but I was led away. All I am suggesting to the Minister is what he should do instead of making this order and the reason why this order should be annulled. He should retain the co-partner-ship scheme and, within the framework of that scheme, he should produce the newer developments in the nationalised gas industry. I believe it could be done. I believe the Government have a firm prejudice against co-partnership and that it comes from the trade union officials and not from the workers.

10.55 p.m.

Sir Ian Fraser: The Parliamentary Secretary used these words: "It is impossible to have co-partnership schemes in nationalised industry." I want to ask the Government to develop that. Why is it impossible? If ever we are to have a great expansion of nationalisation this will become a very important matter because many workers look forward to co-partnership as a way of improving relationships between the two sides of industry. I ask, therefore, why it is impossible? One reason occurs to me—that they do not expect to make a profit and it is only out of profit that you can run a co-partnership scheme: you cannot share something that does not exist. Is that the reason? If so, that

should be noted by both the workers and the community as a whole. I do not want to repeat the arguments made by my hon. Friends, but I may say that I agree with the criticisms they have made. I feel that the Parliamentary Secretary has not given a satisfactory answer why this plan, appreciated by so many in this industry, looked forward to with hope by so many workers in this industry, is now being abandoned.

10.57 p.m.

Mr. John Foster: The Parliamentary Secretary has said that this is really the winding-up of the co-partner-ship schemes and we on this side wish to protest against that. Apparently the Parliamentary Secretary needs two years to develop a new idea, though I think he under-estimated the time. He opposes it on the ground that there cannot be any profits in nationalised industry. The whole thing is ridiculous. He is in a real difficulty when it comes to the question of making arrangements for the ending of co-partnership schemes, for it is provided in the regulations that the managers who are managing the schemes shall not be appointed unless confirmed by the new industry. It is he who comes down and tells us that the co-partnership scheme, which should have continued, has to end because the workers and the area boards will arrange that.
The Minister knows that the view of the hon. Member for North Dorset (Mr. Byers) is the correct one—that in nationalised industry the top trade unionists and the Government go into groups and the workers feel the threat. That happens with many industries. What about concessionary coal in Lancashire? We know what the workers feel and in this industry they know that the Government and the National Union of Municipal and General Workers have got together. Those top people have got together in order to end co-partnership schemes which are of benefit to the industry. They are schemes by which incentive can be given and the answer is not to abolish them but to give the overall benefits of increased co-partnership schemes. That is the answer the Parliamentary Secretary should have given.

10.59 p.m.

Mr. Ewart: I should like to answer one or two of the questions put by the Opposition. The idea that top


level trade union officials have been opposing co-partnership schemes because of the frustrating influence of such schemes on trade union organisation and development is perfect nonsense. It was brought out quite clearly in the Debate on the Second and Third Readings of the Bill and in the Committee what the position of the trade union organisation was in the gas industry with regard to co-partnership schemes.
During the Committee stage the people who enjoyed co-partnership benefits were found to be in consultation with the trade unions and with their leaders, and had evolved a measure of the scheme which has been presented tonight. They said it was inevitable that, in passing from private enterprise to national ownership, co-partnership could not any longer continue on its present basis; and they further said that some new scheme must be devised which, as the hon. Member for North Dorset (Mr. Byers) said, would be particularly within the framework of the co-partnership scheme to take the place of the schemes operating—minority schemes, covering 54,000 people over 58 units in the industry. If co-partnership is to be the order of the industry it cannot be on the existing restricted sphere; it must be an over-all co-partnership, with arrangements designed to cover the whole of the nationalised industry. That is one of the reasons why the trade unions have said that it is impossible to devise immediately a general scheme catering for bonus output payments and other schemes, which are in effect, as hon. Members opposite will agree, co-partnership schemes.

Mr. Byers: Is the hon. Gentleman telling the House that the trade unions are in favour of co-partnership provided it is comprehensive?

Mr. Ewart: What I am saying is that they are in favour of bonus output payments and other incentive arrangements which are, in effect, payments by results. But it is impossible for this industry, or for any other, to switch from private enterprise today to public ownership tomorrow and devise schemes which will satisfactorily cater for all, because while certain sections of the industry have had co-partnership schemes—and I include with those, bonus payment schemes—vast areas have been denied such schemes and

the workers in the industry have not had the benefits which they might have had. These workers have been allied to agricultural workers on low wage rates and that is the element which has to be broken down.
There has to be a unified policy of payments by results and bonus schemes, and I go some way in supporting the hon. Member for North Dorset who said that this is within the general framework of the existing co-partnership schemes. The present scheme could continue for two years, and in the meantime, not Parliament but both sides of the industry, through collective bargaining, should determine future policy on this matter.

11.4 p.m.

Mr. R. S. Hudson: We have had a short but a very illuminating discussion of these regulations, and I think that it is fairly clear from the speech of the Parliamentary Secretary and the hon. Member for Sunderland (Mr. Ewart) that what is at the back of the Government's decision is that they want to get rid of co-partnership; and it is fairly clear how that is being interpreted in these regulations. The Parliamentary Secretary and the hon. Member for Sunderland both defended these regulations as I understood it—and I hope I am not doing them an injustice—on the ground that they had been agreed with the representatives of the workers concerned. They seemed to imply that that was the beginning and end, and that it was no business of hon. Members on either side of the House to go into the merits of the regulations, or to inquire whether they carried out the promises made in the Act, to the workers.
It is perfectly clear from what the Parliamentary Secretary has said that the regulations do not carry out the promises made during the discussions of the Bill upstairs, that the workers engaged in the industry should suffer no diminution of conditions. It is also perfectly clear from what he has said that, in fact, the men concerned are not going to be as well off, either immediately or especially after 1951, as they were before the Bill became an Act and before the gas industry was taken over—for a very good reason, and I am bound to give the Parliamentary Secretary credit for having made no bones about it. He, the Minister and his hon. Friends were pretty sharp when consider-


ing the terms of the Bill. They realised that one of the results of nationalisation would be that there would be no profits for distribution among co-partners.
The right hon. Gentleman was evidently under no illusion before the Bill became an Act that one of the results of nationalisation was going to be that no more profits would be left in the industry and, as we have seen already, that one of the first results of nationalisation would be an increase in price.
I would ask the Parliamentary Secretary if a ballot was taken of employees of any company as to whether they wanted co-partnership to go on. Is it not a fact that the result of that secret ballot was that the men concerned said that they would like to continue to receive the advantages of co-partnership in the future as they had enjoyed them in the past? The hon. Member for Sunderland, and some other hon. Members, judging by their interjections, cast doubt on our statements that the trade unions objected to co-partnership. I should like them to ask the Parliamentary Secretary, or any member of the union concerned, to let them have a look at a circular which I

believe was sent out by the union to their members, in which they definitely urged their members to have nothing to do with co-partnership and suggested that there was no reason for co-partnership in future—that the union, and not co-partnership committees, should in future be the sole means of determining conditions in the industry.

It is abundantly clear from these regulations that the men concerned are not going to be as well off in the future as in the past. We propose to divide on this Prayer, in the confident belief that before too many months have past we shall have an opportunity of restoring co-partnership and showing to the men concerned that they need not have agreed to the bull-dozing of hon. Members opposite—that they would have done better to have trusted to us.

Question put,
That an humble Address be presented to His Majesty, praying that the Regulations, dated 18th March, 1949, entitled the Gas (Copartnership) Regulations, 1949 (S.I., 1949, No. 475), a copy of which was laid before this House on 19th March, be annulled.

The House divided: Ayes, 59; Noes, 197.

Division No. 126.]
AYES
[11.10 p.m


Agnew, Cmdr. P. G.
Fraser, Sir I. (Lonsdale)
Mellor, Sir J.


Amory, D. Heathcoat
Galbraith, T. G. D. (Hillhead)
Morrison, Maj. J. G. (Salisbury)


Barlow, Sir J.
George, Maj. Rt. Hn. G. Lloyd (P'ke)
Morrison, Rt. Hn. W. S (Cirencester)


Bossom, A. C.
Granville, E. (Eye)
Neven-Spence, Sir B.


Bowen, R.
Grimston, R. V.
Nicholson, G.


Bracken, Rt. Hon. Brendan
Hannon, Sir P. (Moseley)
Noble, Comdr. A. H. P.


Braithwaite, Lt.-Comdr. J. G.
Hope, Lord J.
On-Ewing, I. L.


Bromley-Davenport, Lt.-Col. W.
Hudson, Rt. Hon. R. S. (Southport)
Ponsonby, Col. C. E.


Buchan-Hepburn, P. G. T.
Hurd, A.
Renton, D.


Butcher, H. W.
Hutchison, Lt.-Cm. Clark (E'b'rgh W.)
Roberts, W. (Cumberland, N.)


Byers, Frank
Hutchison., Col. J. R. (Glasgow, C.)
Spearman, A. C. M.


Clarke, Col. R. S.
Keeling, E. H.
Stoddart-Scott, Col. M.


De la Bère, R.
Langford Holt, J.
Studholme, H. G.


Digby, Simon Wingfield
Linstead, H. N.
Thornton-Kemsley, C. N.


Dodds-Parker, A. D.
Lloyd, Selwyn (Wirral)
Wheatley, Colonel M. J. (Dorset, E.)


Drayson, G. B.
Lucas, Major Sir J.
Willoughby de Eresby, Lord


Drewe, C.
McFarlane, C. S.
York, C.


Dugdale, Maj. Sir T. (Richmond)
Mackeson, Brig. H. R.



Elliot, Lieut.-Col. Rt. Hon. Walter
Macmillan, Rt. Hon. Harold (Bromley)
TELLERS FOR THE AYES:


Foster, J. G. (Northwich)
Manningham-Buller, R. E.
Mr. Raikes and Mr. Boyd-Carpenter.


Fraser, H. C. P. (Stone)
Marshall, D. (Bodmin)





NOES


Acland, Sir Richard
Blenkinsop, A.
Corbet, Mrs. F. K. (Camb'well, N.W.)


Adams, Richard (Batham)
Blyton, W. R.
Corlett, Dr. J.


Albu, A. H.
Boardman, H.
Crawley, A.


Allen, A. C. (Bosworth)
Braddock, Mrs. E. M. (L'pl. Exch'ge)
Crossman, R. H. S


Awbery, S. S.
Braddock, T. (Mitcham)
Dalton, Rt. Hon. H.


Bacon, Miss A.
Brook, D. (Halifax)
Davies, Edward (Burslem)


Balfour, A.
Broughton, Dr. A. D. D.
Davies, Harold (Leek)


Barton, C.
Brown, T. J. (Ince)
Davies, S. O. (Merthyr)


Bechervaise, A. E
Burke, W. A.
Deer, G.


Benson, G.
Carmichael, James
Diamond, J.


Beswick, F.
Collindridge, F.
Dobbie, W.


Bing, G. H. C
Collins, V. J.
Dodds, N. N.


Binns, J.
Colman, Miss G. M.
Ede, Rt. Hon. J. C.


Blackburn, A. R.
Comyns, Dr. L.
Evans, Albert (Islington, W.)




Evans, John (Ogmore)
McLeavy, F
Shawcross, Rt. Hn. Sir H. (St. Helens)


Evans, S. N. (Wednesbury)
MacPherson, Malcolm (Stirling)
Silverman, J. (Erdington)


Ewart, R.
Mallalieu, E. L. (Brigg)
Simmons, C. J.


Fairhurst, F.
Mallalieu, J. P. W. (Huddersfield)
Skeffington, A. M.


Farthing, W. J.
Mann, Mrs. J.
Skeffington-Lodge, T. C


Field. Capt. W. J
Mashers, Rt. Hon. George
Skinnard, F. W.


Fletcher, E G. M. (Islington, E.)
Mayhew, C. P.
Smith, C. (Colchester)


Foot, M. M
Medland, H. M.
Smith, S. H. (Hull, S.W.)


Forman, J. C.
Mellish, R. J.
Snow, J. W.


Fraser, T. (Hamilton)
Middleton, Mrs. L.
Soskice, Rt. Hon Sir Frank


Gaitskell, Rt. Hon. H. T. N
Millington, Wing-Comdr. E. R.
Sparks, J. A


Ganley, Mrs. C. S
Mitchison, G. R.
Steele, T.


Gibbins, J.
Monslow, W.
Stokes, R. R.


Gibson, C. W.
Moody, A. S.
Stubbs, A. E


Gilzean, A.
Morris, Lt.-Col. H. (Sheffield, C.)
Swingler, S.


Glanville, J. E. (Consett)
Morris, P. (Swansea W.)
Sylvester, G. O.


Gooch, E. G
Moyle, A.
Symonds, A. L.


Grierson, E.
Neal, H. (Claycross)
Taylor, H. B. (Mansfield)


Griffiths, D. (Rother Valley)
Nichol, Mrs. M. E. (Bradford, N.)
Taylor, R. J. (Morpeth)


Gunter, R. J
Nicholls, H. R. (Stratford)
Thomas, D. E. (.Aberdare)


Guy, W. H
Noel-Baker Capt. F E. (Brentford)
Thomas, I. O. (Wrekin)


Hannan, W. (Maryhill)
O'Brien, T.
Thomas, John R. (Dover)


Hardman, D. R.
Oldfield, W H.
Tomlinson, Rt. Hon. G


Hardy, E. A.
Orbach, M.
Usborne, Henry


Harrison, J.
Paget, R. T.
Wallace, G. D. (Chislehurst)


Haworth, J.
Paling, Will T. (Dewsbury)
Wallace, H. W. (Walthamstow, E)


Henderson, Joseph (Ardwick)
Palmer, A. M. F.
Warbey, W. N.


Holman, P.
Pargiter, G. A.
Watkins, T. E.


Holmes, H. E. (Hemsworth)
Paton, Mrs. F. (Rushcliffe)
Webb, M. (Bradford, C)


Houghton, A L N. D.
Paton, J. (Norwich)
Weitzman, D.


Hoy, J.
Pearson, A.
Wells, P. L. (Faversham)


Hubbard, T.
Peart, T. F.
Wells, W. T. (Walsall)


Hudson, J. H. (Ealing, W)
Perrins, W.
Wheatley, Rt. Hn. J. T. (Edinb'gh, E.)


Hynd, J. B. (Attercliffe)
Porter, G. (Leeds)
White, H. (Derbyshire, N. E.)


Jeger, Dr. S. W. (St. Pancras, S.E.)
Price, M. Philips
Whiteley, Rt. Hon W


Johnston, Douglas
Pryde, D. J.
Wilkes, L


Jones, D. T. (Hartlepool)
Pursey, Comdr H.
Wilkins, W A


Jones. Jack (Bolton)
Randall, H. E.
Willey, O. G. (Cleveland)


Jones, P. Asterley (Hitchin)
Ranger, J.
Williams, D. J. (Neath)


Kenyon, C.
Rankin, J.
Williams, J. L. (Kelvingrove)


Kinley, J.
Reid, T. (Swindon)
Williams, Ronald (Wigan)


Lang, G.
Rhodes, H.
Williams, W. T. (Hammersmith, S.)


Lavers, S.
Robens, A.
Williams, W. R (Heston)


Lee, Miss J. (Cannock)
Roberts, Goronwy (Caernarvonshire)
Willis., E.


Levy, B. W.
Robertson, J. J. (Berwick)
Wise, Major F. J.


Lewis, A. W. J (Upton)
Robinson, K. (St. Pancras)
Woodburn, Rt. Hon A


Logan, D. G.
Ross, William (Kilmarnock)
Yates, V. F.


Lyne, A. W.
Royle, C.
Younger, Hon. Kenneth


McAllister, G.
Sargood, R.
Zilliacus, K.


McGhee, H. G
Scollan, T.



McGovern, J.
Shackleton., E. A. A
TELLERS FOR THE NOES:


McKay, J. (Wallsend)
Sharp, Granville
Mr. Popplewell and Mr. Bowden


McKinlay, A. S
Shawcross, C. N. (Widnes)



Question put, and agreed to.

FORCED LABOUR, EASTERN EUROPE

Motion made, and Question proposed. "That this House do now adjourn."—[Mr. R. J. Taylor.]

11.18 p.m.

Mr. Eric Fletcher: Despite the lateness of the hour, I want to raise the general question of slave labour camps in Eastern Europe. with particular reference to the recent discussion on this subject in the Economic and Social Council at Lake Success. Personally, I commend the attitude taken by my hon. Friend the Under-Secretary of State for Foreign Affairs, but I wish he felt able to press for more energetic action.
As the House will remember, the subject arose out of a request by the

American Federation of Labour that the International Labour Organisation should undertake a comprehensive survey on the extent of forced labour in all the member States of the United Nations, and suggest positive measures, including a revised convention and measures for its implementation with the goal of eliminating forced labour. So far as I can understand from the United Nations' report of the proceedings, the net result of the discussions in the Economic and Social Council was to transmit a memorandum to the International Labour Organisation for examination. I hope my hon. Friend can assure the House that this was not merely a dilatory process and that the British Government will continue to press for more positive and definite action to be taken. The statements made at Lake Success seem to show that the present


situation in the U.S.S.R. and elsewhere in Eastern Europe is much more serious than had been suspected. If they are true, they affect human rights throughout the world.

Mr. Deputy-Speaker (Mr. Bowles): I am sorry, but the hon. Member cannot discuss what goes on at international conferences, except in regard to the line taken by His Majesty's representatives. He cannot discuss the conditions arising in other countries. That is breaking the rule about interference with the internal conditions of foreign Powers.

Mr. Fletcher: I appreciate your Ruling. Mr. Deputy-Speaker, but I think it will become apparent, as I proceed, that I am merely trying to give a certain amount of background to indicate the attitude which I think this House would desire my right hon. Friend to take. The allegation is freely made and is supported by considerable evidence of an appalling use of forced labour on a widespread scale. It is estimated and based on statistics supplied by the Russians themselves, that between eight million and 14 million people are living in Russia alone in conditions indistinguishable from slavery. I do not know whether my hon. Friend agrees with that. When I speak of slavery I refer to the kind of institutions which we thought were abolished as a result of the campaign which we in this country associate with Wilberforce, which in America is associated with the proclamation of Abraham Lincoln in 1862 and in Czarist Russia with the abolition of serfdom in 1861. No one thought that that dark chapter of human history might recur so soon.
One of the disturbing features which has resulted from the discussions at Lake Success is that the existence of these labour camps is not denied by the Soviet authorities. Mr. Pavlov referred to them as "corrective labour camps." One knows that the idea of forced labour is specifically recognised in the U.S.S.R., and in accordance with the Soviet penal theories the work which the inmates of these camps have to undertake is technically regarded as re-education. I have always had the greatest admiration for the achievements of the U.S.S.R. and I am a lover and well-wisher of the Russian

people; but it is tragic to think that between eight million and 14 million of these brave, honest people, are being re-educated by a process of working like slaves for very long hours without remuneration.

Mr. Deputy-Speaker: The hon. Member must pay attention to what I said. He cannot suggest interference with the internal workings of a foreign State. He can only suggest to the Minister in charge, or representing this country, that he should take certain steps at the United Nations and with other countries to get an alteration. He must not seek to interfere with the internal conditions in the U.S.S.R.

Mr. Fletcher: I appreciate your Ruling, Mr. Deputy-Speaker, and shall do my best to comply with it. As I have said, the conditions are such as to justify the most energetic action by His Majesty's Government through its representative at United Nations conferences in order to press for the fullest possible investigation into the conditions of labour which exist throughout the world. One knows that it has been proclaimed in the Charter of the United Nations, and is implicit in the whole of the international conception of the United Nations, that human rights are a matter with which world peace is indissolubly connected. It is for that reason that this country, as well as others, must of necessity wish for information about conditions of labour throughout the world. The denial of justice in one country leads to a denial of justice and perhaps to a threat to world peace generally.
Questions which I should like my hon. Friend to press at these international conferences are on some of those matters on which world opinion is concerned. For example, what are the crimes for which so many millions are sent to labour camps? What procedure is followed before sentence is pronounced? What are the working conditions in Karaganda and other camps? Is the punishment restricted to the individual, or is the whole family subjected to re-education? Can the prisoners correspond with their families and friends outside the camp? What is the mortality rate? None of these questions was answered in the recent debates. They were all ignored.
Unfortunately, Mr. Deputy-Speaker, it is only Russia and her satellites that maintain such an inscrutable curtain of mystery about their internal labour conditions. What impartial evidence have we of general trade union conditions in Russia and Eastern Europe and of the hours and standards of the workers? How are trade union conditions generally affected by forced labour on a large scale? If the suggestions one hears on all sides were false, one's doubts could be so easily dispelled by the Russian authorities allowing an independent and impartial inquiry either by the International Labour Organisation or by some other body under international auspices.
I hope we can have an assurance from my hon. Friend that His Majesty's Government will continue to press for such an inquiry. If Russia declines such an investigation, can it be wondered that people will draw their own conclusions? One cannot, unfortunately, ignore the accumulating collection of sworn testimony about conditions in Karaganda and similar camps. I feel that a great many hon. Members are deeply concerned on this subject and would hope, as a result of pressure from His Majesty's Government, that an independent and impartial internationally accredited body would be able to carry out an inquiry facilitated by all countries who are member States of the United Nations, with a view to bringing to the light of day the conditions that exist and securing a general improvement in labour conditions throughout the world.

11.27 p.m.

Mr. Francis Noel-Baker: I want to take up the time of the House only for a minute to ask my hon. Friend what representations the British Government have lately made, either through the United Nations or through any other channel, with regard to some of the unfortunate inhabitants of the camp at Karaganda to which my hon. Friend referred. These particular people, Spanish Republicans who were sent there during the civil war in Spain, have now apparently completely disappeared. Their relatives in their own country or in other parts of Europe have been entirely out of touch with them for many years and the only reports available show that these people

are still being held under conditions of great squalor and great barbarity in these camps in the Soviet Union. I should be grateful if my hon. Friend could say whether the Government are aware of that tragic situation and whether they have been able to take any steps to secure the release of these unfortunate men.

11.28 p.m.

The Under-Secretary of State for Foreign Affairs (Mr. Mayhew): Fulfilling their responsibilities under Article 55 of the Charter, the United Nations have now, for the first time, taken official note of this problem of forced labour. By an overwhelming majority, the Economic and Social Council, at its last meeting, resolved to ask the Secretary-General to approach all member Governments to inquire to what extent they would co-operate in an impartial inquiry in their countries on the problem of forced labour and also asked the I.L.O. to give further consideration to this problem. I am sure that that was a proper step for the United Nations to take. It would, I think, show a great lack of proportion in the work of the United Nations if it continued to deal conscientiously with questions such as racial discrimination, infringement of trade union rights and freedom of information, and yet turned a blind eye to a form of oppression which includes all those evils and also goes far beyond them.
I am grateful for the appreciation which my hon. Friend showed in his speech of the part played by the United Kingdom delegation in this connection, and I can give him the assurance he asked, that we shall continue to press this question. Citizens of Western democracy have a special right and a special duty to inquire into and make known the truth about forced labour in Communist countries. This right and this duty arise from the fact that all over the world Communists are attempting to weaken and undermine Western democracy by false propaganda about the superior virtues of their own system. We have therefore the right and duty of exposing Communist pretensions, of making the truth about Communism known in defence of Western democracy.
I recently presented at United Nations some of the evidence of the existence of mass forced labour in the Soviet Union


and other Communist countries. In an Adjournment Debate such as this I have unfortunately not enough time to cover the ground again nor to quote the fresh evidence which constantly reaches His Majesty's Government on the subject. I can do no more than briefly describe the source of this evidence which I have described. The best evidence is that produced by the Soviet State itself. Despite rigid secrecy and censorship, indications of the truth occasionally leak out in official Soviet speeches and publications. For example, reference to forced labour was made by Mr. Molotov in his speech to the Sixth Congress of Soviets in 1931. References are found on pages 1087 to 1089 of the 1939 volume of the official periodical "Sovietskya Yustitsia," and in the second volume of the year 1934 of the same periodical. There is a description of the use of forced labour on the famous Belomor Canal Project contained in the book "The Baltic-White Sea Canal in the name of Stalin" edited by Maxim Gorki.
Suggestive information can be deduced from calculations based on the official figures of the circulation of Soviet newspapers to places of detention, and also from calculations based on wages, the labour force and the total payroll of the Soviet Union. Much can also be deduced from such enactments as the Decree of 1935 giving to the Special Council of the Ministry of Internal Affairs the power to inflict on persons "regarded as dangerous to the community" banishment to places under supervision or detention in forced labour camps for a period of up to five years. These powers are exercised without any order of a court. This is some of the official evidence which I surveyed at the United Nations in connection with the resolution before the Economic and Social Council.
A second kind of evidence comes from individuals who have escaped from the Soviet orbit. Around the vast territory controlled by the Soviet Union from Korea to Germany, people are continually fleeing to the free world. Many of these people have either been in camps or had close relatives or friends there, or have known something about them from the police or military side, or have been connected with the engineering projects

on which forced labour is used. It is probably always wise to treat with caution the evidence of refugees about the conditions of life from which they have fled. Many will be bitter and prejudiced; some may hope to gain advantage in their country of asylum by exaggerating the horror of conditions from which they have fled. But though we may treat these refugees' stories with the maximum scepticism, we cannot wholly ignore them. Their stories have been carefully examined and compared. Men who have never met each other and who come from different parts of the world are able to draw the same plan of a camp.
There is an enormous literature about Soviet forced labour. I have a list here of the titles and authors of 16 books on the subject. Most of the authors are escaped prisoners or former Soviet officials. I must not of course be taken as vouching for the authenticity of these books; some are certainly unreliable; but taken as a whole they form part of such a large mass of testimony that I do not think their message can be ignored by reasonable people. It is supplemented by the opinions of numbers of displaced persons and refugees from the Soviet Union some of whom held quite responsible posts in the Soviet State.
The sources of information on forced labour in Communist countries outside the Soviet, which I quoted at the recent meeting of the Economic and Social Council, are of an even more official nature. There, forced labour has not yet reached the scale or severity of Soviet Russia, but the seed has been firmly planted. In Czechoslovakia, no attempt is made to disguise the fact that forced labour camps now exist. I would draw the attention of the House to Law No. 247 of 25th October, 1948. Article 1, Section 3, of this law states that prisoners are employed on national work in fulfillment of the general economic plan. Article 2, Section 1, states that they include persons between 18 and 60 who shirk work or "menace the structure of the people's democratic order," as well as financial and economic offenders. Article 3, Section 2, states that officially sentences run for three months to two years. Article 5 states that appeals cannot delay the execution of the sentence. Article 6


states that sentences may be shortened or prolonged at the suggestion of the camp administration.
In Bulgaria, I draw attention to the law of November 1945 establishing "labour education committees" and the law of 1946 establishing "idlers' camps." The militia camps submit the name of anyone as an idler to the Minister of the Interior who can then mobilise him for compulsory labour. The idlers' camps are the milder form of concentration camp, involving six-month sentences of heavy manual labour.
Finally, in the Soviet zone of Germany both the concentration camps and the Nazi technique have been taken over and improved upon. Research undertaken a year ago indicated that the German concentration camp population was denser than in Germany up to 1939. There are, we have reason to believe, 200,000 to 300,000 prisoners in six major and six or seven smaller camps. Time does not permit me to survey the documentation of the concentration camp population of the Soviet zone of Germany.

Mr. E. Fletcher: Perhaps my hon. Friend would permit me to intervene?

Mr. Mayhew: I am sorry, but there is not time. I have been asked about the scale of forced labour in the Soviet Union. Many wild guesses have been made and also some grotesque exaggerations. Most responsible estimates vary between five and twelve million. I think, however, that we should distinguish between various types of this evil. To begin with, there is forced labour in the sense in which the term is generally used: that is, people detained in camps or penal colonies, working either for their keep, or for a trifling sum in cash, on major mining and industrial projects. Then there is the milder form of penal exile known as Silka. This is a continuation of the Czarist system of exile: people are simply removed from the areas in which they live and are sent to remote districts, though they are free to move about the immediate locality of their exile. Article 22 of the official publication, "Basic principles of criminal legislation of the U.S.S.R." reads, in part, as follows:
…punishment in the form of exile (or silka) or exclusion from an area can be applied

by sentence of the court on the recommendation of the State-Prosecutor against persons recognised as being socially dangerous, without any criminal proceedings being taken against these persons on charges of committing a specific offence, and also even in those cases where those persons are acquitted by a court of the accusation of committing a specific crime. The above regulation is specifically incorporated in the criminal codes of several union republics.
That is a quotation from an official Soviet document.
On 12th July, 1946, the Supreme Court ruled that the above provision was to be regarded as having lapsed since legislation on "Soviet Law Courts," passed subsequently, had "not provided for this regulation." But whatever the position may be about those acquitted by the courts, the legislation embodying the rule about socially dangerous elements has not yet been specifically repealed.
After this comes "corrective labour," which is a mild form involving such work as chopping wood, usually for a few months at a time, to which minor offenders are sentenced. There is then the extensive system of sentencing manual and clerical workers who are late or lazy. or in any other way fail to fulfil their norms of either time or output, to periods of labour without pay or for a quarter of their wage, at their own work. where they are under open arrest for the period of their sentence. Anyone who is more than 20 minutes late for his work, or is late more than three times in a single month, can be sentenced to periods varying from a fortnight to six months on quarter pay.
The Soviet Government and the Soviet delegates at the United Nations meetings said that there is no mass forced labour in the Soviet Union, but merely a few corrective labour camps conducted in a praiseworthy, civilised way. Sufficient evidence is already available to the free world, regarding the size and extent of these camps and the conditions which exist in them to refute this argument. Moreover, we are bound to ask, if the argument is true, why were the camps kept so secret? It is open at any time to the Soviet Government to prove its case by letting the world see the conditions which exist. If these camps are relatively small, humanely-conducted corrective camps, why are they shrouded in such absolute secrecy? They are even


more strictly guarded and concealed than were Hitler's concentration camps. Freedom of movement for foreigners was greater in Nazi Germany than it is in the Soviet Union today. Foreign diplomats were not restricted to a radius of 50 miles from the capital city. Newspapermen travelled freely in comparison with what is now possible in Soviet Russia. If the Soviet Union is proud of its camps and not ashamed of them, why does it hide them from view to an extent which even Hitler never found necessary, even in respect of his concentration camps?
At the last meeting of the Economic and Social Council, I suggested to the Soviet delegate that the Soviet Government might invite representatives of U.N. to visit the following areas: The great penal area of Karaganda in the Kazakh Desert; the concentration of camps at Dalstroi in the Far East, including the coalmining camp on the Kolyma River; the Pechora group in the North of Europe; the Lake Baikal group in Siberia; the Yagri group in the Archangel region; and the groups in the Lapland, Novaya Zemlya, Sakhalin, Kamchatka and the Novosibirsk, Krasnoyarsk and Arctic regions. I stated that our information suggested that these camps included only a fraction of the total forced labour population of the Soviet Union. But visits even to these camps would do much to reassure the outside world.
The Soviet delegate replied very briefly that the Soviet Government would certainly not allow these areas to be inspected by what he chose to describe as "American Gauleiters." Later in the debate, however, the Soviet delegate put forward a counter-resolution on the subject of forced labour. This called for the establishment of a workers' committee reporting to workers' organisations throughout the world, including the W.F.T.U., the T.U.C., the A.F.L. and others. This committee, consisting of over 100 workers' representatives, should study workers' conditions in various countries of the world. After he had introduced his resolution, the Soviet delegate was naturally asked whether, in carrying out its functions, this workers' committee would be able to visit Soviet Russia, amongst other countries. At first the Soviet delegate evaded the question, but eventually, under repeated question-

ing, he confessed that it would not be allowed to visit Soviet Russia. He stated that if the committee were to visit Soviet Russia in the course of its duties, its report would be interminably delayed.
I quote the official summary record of the Economic and Social Council, Document E/SR. 263, which makes this remarkable fact plain:
His reply was that if the commission were empowered to visit all countries including the U.S.S.R., it would take approximately 10 years to reach any conclusions.
It was thus seen that the Soviet objection was not, in fact, founded upon fear of inspection by "American Gauleiters." The Soviet Government objected to Soviet workers' conditions being inspected by workers' committees established on their own formula and at their own initiative. I think that is a truly remarkable and revealing fact, which deserves to be widely known. The attitude of the Soviet Government redoubles the fear and anxiety of the world on the whole subject of forced labour in Soviet Russia.
I have not covered even a fraction of the ground on this subject, nor have I touched on the human side. I have said nothing about the separation of families or the mortality rate. I have introduced no emotion in what I have said. I have also not replied to a number of questions put to me regarding the trade union rights of workers in the Soviet Union. I sincerely wish it were possible to take an entirely different attitude toward the question of the workers' rights and conditions in the Soviet Union. We know what they started from; we know the standard which obtained under the Czarist regime and which was inherited.
We would sincerely wish to take an attitude of sympathy and co-operation but a myth is being sedulously fostered about the standards of the Soviet worker. It is a myth deliberately employed to undermine Western democracy. The myth is believed because of the brazenness and the impudence of Soviet propaganda and pretensions and because of the impenetrable wall of secrecy surrounding Soviet Russia. Therefore, it is the duty of leaders in the Western democracies to expose the true facts; to expose these Communist pretensions. I hope and believe that the initiative of the United


Nations will be warmly followed up; and I hope that this Debate, which has covered only one part of the conditions of the life of the workers in Soviet Russia, will have established at least one part of the truth which is, that so far as the interests of the workers are concerned,

Western democracy has nothing to learn from Soviet Russia.

Adjourned accordingly at Thirteen Minutes to Twelve o'Clock.